Yet how equitable is a system like that? Should the government give me tax credits to mow a neighbor’s lawn? If not, why not? The simplest response people have to this question is that in private transactions, parties negotiate for services. One way or another, the lawn gets cut; government distortion of the lawn-cutting market is unnecessary. Giving $5 to those who mow lawns is $5 less for roads, disaster relief, and other necessary government functions.
And yet, these market distortions nonetheless happen, even in generally no-nonsense places like the Show-Me State. More than $1 billion in tax credits have gone toward projects at about 2,200 Saint Louis City addresses, representing more than 45 percent of all the tax credits that the DED issued to the entire state. The problem? Saint Louis only makes up 5 percent of Missouri’s population.