While the new budget deal isn’t a grand bargain, it is a necessary first step, writes CFR’s Robert Kahn on his blog “Macro and Markets.” The deal won’t dramatically reshape spending over the next two years, but it will restore a sense of sanity to U.S. fiscal policy. Additionally, Democrats and Republicans both crossed former red lines, giving a sense of where the budget debate may head in the coming year.
Many states and cities offer a variety of tax incentives (credits, exemptions, deductions) to businesses with the aim of spurring growth and job creation, but few carefully analyze the costs and benefits. Some recent research has brought the wisdom of corporate tax breaks into question, and several states are considering reforms to assess the public value of their programs. Read more »