Corporate Welfare

Some States Finally Getting Out of the Hollywood-Subsidization Business

Lawmakers slowly realizing that giving money to the film industry makes no economic sense

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The best TV taxpayers can buy. |||

One of the most egregious forms of modern corporate welfare is the statehouse giveaway to television and film production, a star-struck economic nonsense maneuver that went from about 0 to 50 in less than two decades. The science is settled: This deal stuffs the pockets of one favored industry at the expense of the rest of a polity's taxpayers, generating headlines like "Michigan's Film Industry took $500 Million in Subsidies, Produced Laughable Number of Jobs." And confiscating my money to reward a politically favored industrial constituency is more than just wasteful and ineffective, it's morally wrong. 

That's why this news, reported by the Boston Globe, is encouraging:

In Maryland, where the Netflix series "House of Cards" is shot, a recent report by the legislature's nonpartisan staff found that for every dollar in film incentives the state doles out, it gets back only 10 cents in state and local tax revenue.

In Louisiana, known as "Hollywood South" for the size of its entertainment industry, a new study commissioned by the state's economic development department says taxpayers lost as much as $184 million on film tax credits last year.

In the fall, Nevada shifted most of the money from its film incentives program into a package of tax breaks for electric carmaker Tesla. And Michigan and North Carolina have substantially scaled back their credits.

"They're a colossal waste of money," said Paul Stam, the Republican speaker pro tempore in North Carolina's House of Representatives. "We were sending big checks to Hollywood producers and rich guys out of state." […]

In Michigan, Republican Governor Rick Snyder has labeled film incentives and other targeted tax credits the "heroin drip" of government.

And here's your morning LOL:

"If these programs were not working — not producing jobs, not producing investments — they would be eliminated," said Vans Stevenson, senior vice president of state government affairs for the Motion Picture Association of America.

Right, because that has stopped so much crony capitalism before….

Watch Reason TV interview producer Gavin Polone on the folly of subsidies below:

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  1. “If these programs were not working ? not producing jobs, not producing investments ? they would be eliminated,” said Vans Stevenson, senior vice president of state government affairs for the Motion Picture Association of America.

    Baghdad Bob would be embarrassed.

    1. Oh, come on: trust us.

  2. In the fall, Nevada shifted most of the money from its film incentives program into a package of tax breaks for electric carmaker Tesla.

    “We’re tired of wasting tax dollars on the film industry. Let’s waste it on the electric car industry instead!”

  3. I just can’t take seroiously anything said by someone named Gavin.

  4. “Subsidies” and “tax credits” are not the same thing, no matter how much the Globe says

    States subsidize up to 30 percent of production costs with tax credits.

    If a state is writing checks to the production company, that’s a subsidy and is taking money from the taxpayer. If a state is giving a production company a tax break, that costs the taxpayers nothing, since without the tax break the production would probably be happening somewhere else and the state still wouldn’t be getting tax revenue from it.

    Whether or not the state government should be doing that is a separate issue.

    1. Like many, you assume these are your average run of the mill tax credits. They aren’t. And yes, the state is literally writing checks: http://tmblr.co/ZAm8Wn1G3K-vc

  5. Could we please separate tax credits, i.e. being allowed to keep some of your $ that’d otherwise be taken in taxes, from actual subventions?

    1. As I replied to Warren above… Like many, you assume these are your average run of the mill tax credits. They aren’t. And yes, the state is literally writing checks: http://tmblr.co/ZAm8Wn1G3K-vc

  6. My ex-wife makes $75 every hour on the laptop . She has been laid off for seven months but last month her pay check was $18875 just working on the laptop for a few hours.
    Look At This. ???? http://www.jobsfish.com

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