Richard Bernstein at Financial Times proposes an interesting solution to the U.S.’s current economic problems that is targeted specifically at creating jobs and stimulating production, exports and growth on U.S. soil — turn the entire country into an “Enterprise Zone.” The idea sounds radical at first — enterprise zones are traditionally economically depressed areas in which companies receive various tax credits and other incentives in exchange for locating job-creating facilities — but the reasoning is sound:
- Federal investment tax credits (plus accelerated depreciation on new equipment and any additional tax credits, workforce training, etc. offered by state/local governments) would be granted to non-financial, non-retail companies that are locating new facilities anywhere in the U.S. from anywhere else in the world during a specified window of time.
- Such a program would actually shrink the federal deficit — the tax credits provided are cost-neutral (if the business was not located in the U.S. before, it was not paying these taxes to begin with) and the jobs created would create tax revenue (both on the state/local and federal level) and stimulate the economy.
- In contrast to the various stimulus plans and bailouts that have already been attempted, this plan would cost nothing to taxpayers.
The entire proposal is worth a read — we thought it was an ingenious application of a strategy that is widely used on the state level and often sees great success.
