There is a terrific editorial in the Post-Dispatch today about how local communities use tax incentives to lure businesses. I recommend it highly. The focus is on Clayton, the home of the Show-Me Institute, which held out against tax giveaways longer than most other communities. Unfortunately, Clayton now feels it must compete better with other municipalities that are giving away the store, and it would be hard to prove them wrong.

The Post’s editorial touches on many of the same issues we have been writing about here at SMI, and I hope — without sounding as if I ate too much hubris — that some of our work may have influenced the Post’s thinking. Some of the key points that SMI has extensively made include: tax incentive decisions should be made regionally, lower tax rates for everyone are preferable to tax incentives for the chosen few, and some areas have still managed to succeed without using these types of incentives.

At least Clayton has chosen to use partial tax abatements as the primary incentive. In my opinion, that option is the best-of-the-worst in this game, with full abatement and TIF being worse — and TIF with the use of eminent domain the worst of all. So I give credit to them for that, for what it’s worth.