These businesses will need to pick up the tax burden left due to the incentive programs' offering of tax abatements. One answer is to create a more equal tax across the board. Incentives affect the economic decisions of companies. What might appear to be most efficient, and thereby most profitable in a free market, may be the wrong move after taxation is taken into consideration. So again we see the offering of incentives, in this case selective , or targeted tax abatements distort the efficiency that is the forte of the free market system.
More waste is introduced when companies dupe the government.
The Charlotte Observer found several companies abusing the system in North Carolina. Weeks later it closed a plant in a nearby city employing 150. Cases such as these show that incentive programs leave much to be desired even beyond their theoretical causation of inefficiency in the marketplace. States have begun to curb such blatant abuse of incentives by adding clauses in contracts which mandate that the businesses live up to their commitments. Economic development specialists hope that such precautions will make businesses more accountable to the government.