Monday, January 20, 2014
Economic Policy for the 21st Century: “Wolf of Wall Street” Won Oscar for Best Tax Break:
Although Oscar nominations were announced yesterday, one winner has already been determined: the Oscar for Best Tax Break (not a real Academy Award). Among the nine films nominated for Best Picture, The Wolf of Wall Street received the largest state tax incentive, a 30 percent tax credit from New York State. In effect, New York State taxpayers paid for a third of its $100 million in production costs. ...
All nine movies nominated for Best Picture were filmed in jurisdictions with movie production incentives. Clearly, a lower cost of doing business attracts the best filmmakers to these locales.
The important question is: do these incentives pay off for the states?
The answer is no. Similar to most targeted tax breaks, movie production incentives routinely fail to deliver on the economic promises made by their proponents. Supporters frequently claim movie incentives create jobs and lead to net gains in tax revenue. However, data from several states find movie production incentives generate less than 30 cents for every lost dollar in tax revenue.
(Hat Tip: Glenn Reynolds.)