Sunday, October 31, 2010
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.