It moved and laid off its Chicago work force. While the Wisconsin town gained employment, it may be in for some surprises. There are numerous examples where jurisdictions offering lavish subsidies were burned. The subsidies never pay for themselves in some cases because companies move on well before they pay off any significant portion of their subsidy. The area's poorest residents are paying the State's highest property taxes to fund a tax break for the largest corporation in America.
Companies are well aware of the influence they wield in such a competitive climate.
A recent Office of Technology Assessment report revealed that a large regional bank that was planning to locate a new facility in the downtown was also planning to threaten to locate in an adjacent state in order to leverage incentives from the city government. Services and Public Goods Senior officials at the Federal Reserve Bank of Minnesota, Melvin Burstein and Arthur Rolnick, argue that competitive subsidies typically result in local governments that under- provide public services in order to subsidize large corporations. New York City's recent experience illustrates this public cost. No companies moved, so no locational efficiencies were gained. The result was a transfer of wealth from the public sector to the private sector.