October 31, 2010
Recasting State Tax Incentives for HollywoodJoshua R. Schonauer (J.D. 2010, Ohio State) has publidhed Note, Star Billing? Recasting State Tax Incentives for the "Hollywood" Machine, 71 Ohio St. L.J. 381 (2010). Here is the Conclusion:
State tax incentives for the film industry have had a positive effect by reining in the loss of jobs and revenue to other countries by way of runaway productions. However, the measures often seem reactionary rather than balanced, leading too frequently to a windfall for the filmmakers. In order to sustain a thriving entertainment economy, state legislatures should consider a number of factors when crafting the appropriate tax credit system for their states. In the face of harsh economic times, states must first protect taxpayers' dollars before investing in a risky entertainment infrastructure.
The film industry has always been culturally important, helping to raise the spirits of Americans during the Great Depression and other times of economic hardship. The fact remains that Hollywood is not going anywhere; in times of financial crisis, the movies remind you that you can bet your bottom dollar that the sun will be out tomorrow. But when the bottom dollar balloons to $27 million in Benjamin Button's pocket, even that eternally optimistic, red-haired orphan might contemplate cutting back the film studios' allowance.
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Save those tax breaks for sports stadiums! Hollywood just takes the money back to California to buy weed and donate to Democrats, and it leaves nothing except memories for the suckers who gave them the film incentives. Professional sports teams, at least, contribute something to the local economy on an on-going basis, and it's easier to root for your hometown sports hero than a radical Hollywood activist. Or, better yet, don't feed the egos of local politicians, who love these ideas, and vote against major, risky tax incentives for companies rich enough to pay their own expenses without the taxpayers' help.
Posted by: Woody | Oct 31, 2010 8:47:42 PM