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There are a few problems with reducing taxes to attract businesses. First, the businesses that come tend to leave after the tax incentive expires. They leave behind the mess of abandoned buildings which blight neighborhoods, reduce property values, and increase crime rates.
Second, the reduced tax revenues must be made up in other areas or the citizens must do with fewer services. What usually happens is workers are taxed more either by income tax, sales tax, or property tax. Nothing is free.
If you are genuinly interested in this topic you might enjoy researching the subject of "race to the bottom".
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