Question

Please read the following on NC Economic Incentives: We have all heard that Amazon is planning on opening a second headquarters. The hope is that this new HQ could bring in 50,000 jobs and $5 billion in investments. As a result, states are in a bidding war to attract Amazon. These bids are what we can economic incentives. Many politicians have argued that the government should provide economic incentives to companies in order to bring jobs to NC. The proponents of economic incentives programs say that they are necessary for the State to give tax breaks, subsidies and other benefits to attract large companies to NC. Unfortunately, many other states are doing the same thing, thus making any NC incentive program difficult and expensive. For example, after some of the first Hunger Games movie was shot in NC, much of the subsequent movies went to Georgia. The point is that other states are outbidding NC and businesses are following the money and not coming to NC, but instead are going to other states. The opponents of State Sponsored Economic Incentives for businesses call this Corporate Welfarism. They point to the many times that government has failed to achieve its goals. Opponents of government economic incentives say that the program is too expensive for the results generated. More fundamentally, opponents say that the state shouldn't use tax money to pick winners and losers. They point to the failed attempts to pick Dell, Google, and Boeing; they point to government mistakes such as the "famous" Randy Parton Theater Project. (See here: https://www.carolinajournal.com/news-article/no-celebration-for-randy-parton-theaters-10th-birthday/) Additionally, they claim that picking winners leads to crony capitalism. 2. Suppose that you have been called to Raleigh to give expert testimony before a joint North Carolina House and Senate Committee assigned to review North Carolina's economic incentive policy. Using the questions below to help guide your testimony to the committee, write a three to four page paper in a Microsoft Word document to respond to this issue: When government uses tax monies to attract businesses (creating economic incentives--both the positive and the perverse), what are the short-term effects? What are the long-term effects? What are the effects on the local community? What are the wider implications? Can this problem be explained in a game theoretic context? If government economic incentives are so good, then why is it that North Carolina has reduced the amount of incentives offered to film and television companies? [Note: When economists use incentives, they mean it in a particular sense: broad institutions that influence people's decisions. So while a coupon for $5 off is an incentive, that is not what is being asked. Instead, economists look at broader policy implications. For example, unemployment insurance pays people if they do not work. Thus, the policy (regardless of intent) creates an incentive not to work.] 3. Your paper should be in written in APA style with appropriate references and bibliography. Titles pages and abstracts are NOT necessary.

Answer 1

NC economy stands for north Carolina economy. Currently total gross state product of north Carolina is 4.5 million with employment of 4.1 million.
As per given question this would be a good plan of Amazon for opening can headquarter.
First of all we must know what is tax incentive. Tax incentive is used to encourage economic activity of the country on the other side subsidy means government sum of money grands for boosting business activity.
The positive and long term effects this is it will increase firm profitability by decreasing tax burden. Also tax credit will be flexible. It will also encourage foreign direct investment which will further help in increasing gross Domestic Product rate of country.
On the other side negative aspect and short-term aspect is that there will be too much investment in a single particular project and this could also lead to the end of privatization also due to amazon second headquarters political imbalance will run the business.
Also the local community will face social economical and political hazards