The debate around corporate tax breaks usually centers on a specific giveaway. Should Virginia have given hundreds of millions of dollars to Amazon for its so-called HQ2? Does Netflix really need $24 million, plus an undisclosed amount of property tax reductions, from New Mexico? But playing whack-a-mole and attempting to stop one deal at a time isn’t the most efficient remedy for addressing the issue of states and localities dishing out tens of billions of dollars to big corporations every year.

There is a better way: an interstate compact. This would allow multiple states to join together to agree not to use tax breaks or other economic enticements to lure corporations to hop from one locale to another. The hope is to eventually eliminate corporate incentives entirely and introduce democratic input and accountability to an area of policy lacking it.

A model for this sort of compact is the one Kansas and Missouri implemented in 2019, in an effort to stop corporations from playing the two states against each other to claim incentives by moving across the greater Kansas City metro area. Since that time, deals that would have been approved with barely a thought by one of those states have been rejected, saving taxpayers money.

The interstate compact solution is attracting increasing attention. In the 2021-2022 legislative session, lawmakers in 11 states have introduced bills to form a compact to eliminate corporate tax giveaways, and a few more bills are in the works. This is up from five states in 2019. (Full disclosure: I work with a coalition of state lawmakers and policy experts and advocates that tries to get these bills written and introduced.)

A compact gives state lawmakers a way around the political problem of corporate tax incentives, which is this: No officeholder wants to look like they are doing nothing for their constituents, while those in the next state or town over are announcing deal after deal. No one savors the appearance that they’re losing jobs to the pol down the street, even if those jobs don’t actually materialize after the ink is dry and everyone has moved on to the next thing. The interstate compact aims to solve this issue by having states multi-laterally disarm, together. It is a political solution to what is, at its core, a political problem, not an economic one.