E ach year, cities and states spend $50 billion–3 percent of their total expenditures–on incentive programs to recruit or retain businesses. Some are theatrical: Amarillo, Texas mailed more than 1,000 companies a check for $8 million, cashable if the company promised to create 700 jobs in the city. Others are more prosaic, like the routine exemptions from property tax given to even large and profitable companies like Wal-Mart. In almost all cases, these deals are harmful, eroding the tax base, impairing education funding, and fomenting a destructive race to the bottom as states clamor to give more subsidies and tax breaks to companies.