California Tax Incentive’s Success Is in Its Failures (1)

California’s experiment in creating an accountable and transparent business income tax credit to reward companies for job creation and capital investment seems to be working, even though half the companies winning the credit aren’t able to keep their promises.

Since launching the California Competes Tax Credit in 2014, the state has awarded $1.3 billion in credits to 1,121 companies that promised to expand their footprint in the state instead of going elsewhere. Businesses from craft breweries and garage door installers—and increasingly, corporate giants like Tesla Motors Inc. and Lockheed Martin Corp.—have agreed to fulfill commitments within five ...