When deciding where to locate or relocate, businesses look for an educated work force, a high level of services, a low business-tax rate, and close proximity to markets and raw materials
However, although each of these considerations has approximately equal importance, the lack of proximity either to markets or to raw materials often causes municipalities to lose prospective businesses, whereas having a higher-than-average business-tax rate rarely has this effect
In general, the higher the rate at which municipalities tax businesses, the more those municipalities spend on education and on providing services to businesses.