Intergovernmental competition
•1. State and local
governments try to enhance their own
economies by courting business and economic growth
•2. They use tax incentives to lower tax rates
to businesses
•3. New businesses, such as shopping malls, will
raise the tax base and may be
lower the tax burden for residents
•4. Developers play governments against one
another to lower tax
burdens
•5. Sports teams have especially sought
“sweetheart deals” to
stay in a particular city