TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Friday, May 25, 2012

The Madness of State Film Tax Incentives

Adrian H. McDonald (J.D. 2007, South Texas), Down the Rabbit Hole: The Madness of State Film Incentives as a 'Solution' to Runaway Production, 14 U. Pa. J. Bus. L. 85 (2011):

This working paper is a "sequel" to my first law review article on runaway productions, Through the Looking Glass: Runaway Productions and "Hollywood Economics, 9 U. Pa. J. Bus. L. (2007).

Since 2007, there has been a race to the bottom as virtually every state has enacted significant, if not detrimentally generous, tax incentives to lure film and television production. The efficacy of these incentives is evaluated at length, with particular attention paid to the origin and implementation of tax incentives in California, Massachusetts and Louisiana - states with colorful backgrounds on this issue. The paper suggests that the current "solution" to the runaway production problem (competing state incentives) is counter-productive to the point of becoming the problem and calls for the enactment of a single national tax incentive for the entire nation to better compete with foreign production locales like Canada.

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