From The Register
Game development firm OysterWorld is opening up a base in south Wales that will bring 60 jobs to the region in the next three years.While I normally can't stand subsidies, that's not too bad a deal - £16K/job, for the sort of jobs that produce something that people want, in an industry that have people that make a lot of money. It's basically reversing a load of the income tax.
Wales beat out Canada as the site for the development, marketing and research centre, which will be backed by £1m from the Welsh government.
But what it's really doing is fixing the result of the problem, rather than the problem itself.
Income tax takes no account of how portable a job is. A bloke writing computer games gets taxed at the same rates as someone selling snowglobes of the houses of parliament. But one of these can go anywhere in the world and do it, the other has to be in London.
So, we throw money at companies to move to Humberside, Wales etc as a way of compensating for the problem. We adjust their tax to cover for the fact that we don't have Land Value Tax. The problem is that it's crude, complicated, means government is picking winners rather than letting the market work things out, requires lots of bureaucracy and corruption and only works for companies of a certain size.
If we had LVT, we'd be able to scrap all of this, all the rural development fund malarkey. Companies would move to former mining areas because well, they could get really cheap staff because the staff would be paying bugger all in income tax, and the UK would probably become a major location for startup businesses.