The District’s strategy for targeting industries, and the dollar value of incentives offered, is unique when compared to the tax incentive strategies of neighboring Baltimore, Maryland and Virginia Beach, Virginia, as well as other large cities around the country.
The District’s incentive-granting strategy relies primarily on local property tax abatements. Since D.C. is a local and state level government combined, its more frequent use of property tax abatements—which is a function of local tax authority—is not surprising. However, the paucity of other types of incentives in the District that are common elsewhere across the country warrants future study to determine the most effective incentive-granting strategy.
Further analysis reveals a lack of coherent targeting strategy in the ways the District uses tax incentives. Research suggests that tax incentives would be more efficient and effective if tax abatements more strategically targeted export-based industries—or sectors of the D.C. economy that primarily cater to tourists, commuters, and or sends products to those outside of the District.
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- What are tax incentives for economic development?
- The usefulness of tax incentives in D.C. is limited by the make-up of its sectors
About the Author
Abraham Song is a Wilkes Scholar at the D.C. Policy Center. Dr. Song holds a Ph.D. from the Schar School of Policy and Government at George Mason University. His work was awarded the Provost’s Office Dissertation Fellowship and the Vernon E. Jordan Jr. Doctoral Fellowship. As a Wilkes Scholar, his work focuses on topics of economic development in the Washington metropolitan area; specifically, the emergence of ICT and biotech clusters, and Amazon’s arrival in the region.
About Wilkes Fellows & Scholars
The Wilkes Fellowship and Scholars program provides resources to young researchers in support of the D.C. Policy Center’s mission of producing objective, targeted, and high-quality data analyses to support robust and productive policy debate in the District of Columbia. The Wilkes Fellowship and Scholars program is endowed by gifts from The Wilkes Company and Quadrangle Development Corporation.
Feature photo by Ted Eytan (source).
D.C. Policy Center Fellows are independent writers, and we gladly encourage the expression of a variety of perspectives. The views of our Fellows, published here or elsewhere, do not reflect the views of the D.C. Policy Center.