re: WSJ major opinion piece on film industry welfare--quotes Jindal

Couple of counter-arguments:

1. We don't know what the direct and indirect economic benefits of the film industry in Louisiana are. I'm not sure the Louisiana Budget Project analyses, or any other analyses, can fully account for that. We can estimate direct economic spillover - direct tax receipts produced by the film companies - but I'm not sure we can calculate indirect services. I'm not sure we can calculate for instance the overall growth of businesses around the films. We also never talk about the incomes that are produced for workers that participate in the industry, which inevitably leads to more money in our tax coffers (not to mention whatever the headline actors pay in state income taxes while they're here. We already know NBA and NFL players are made to pay state income taxes for the time they spend in various states.)

The Louisiana Budget Project, and other left-wing think tanks, will just go off direct tax receipts produced, for this and any other tax cut. For instance, a lot of liberal analyses say that the Reagan tax cuts didn't make up in revenue the revenue that was lost due to the cuts, but overall tax revenues went up during the 1980s. Additionally, you can never estimate for sure how many new businesses would have stayed out of your state if you had never cut the tax, especially in a world that is getting flatter and where capital can move around.

Finally, we can't calculate the brand loyalty to Louisiana generated by having all this film and TV activity. You're telling me that more people weren't interested in vacationing in Louisiana because of the Duck Dynasty show, or because The Talk did their Super Bowl shows live from Jackson Square? People are probably watching and saying, "hey, a vacation to New Orleans would be cool." That's how this works.

2.

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But as California's Legislative Analyst Office (LAO) has pointed out, "these subsidies give businesses in the motion picture industry an economic advantage that other businesses do not receive." As a result, "all other businesses and taxpayers effectively pay a higher tax rate than they would otherwise."

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That's a very fair argument, and I might be annoyed to if I were a business owner in the state. But I think the spillover economic impact eventually helps everyone. I'm not saying you do this for every industry, but I don't think the film industry and the tax cuts it gets in Louisiana have demonstrably hurt us.

3.

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The Louisiana Budget Project, a left-leaning nonprofit, also has found that most of the benefits of the state's transferable tax credits "flow to a few wealthy taxpayers." Nearly two-thirds of the 2,056 Louisiana taxpayers who claimed credits in 2009 reported incomes above $1 million while 92.25% earned more than $250,000. Taxpayers subsidized each production job to the tune of $60,000.

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Well duh, the people who have the resources to bring businesses and films to this state are going to have money. This is a reality of life painted as an emotional outrage.

4.

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Most of these jobs are not destined to last. Like hustlers, production studios leave once they've finished their job and gotten paid. They then hook up with the next client that makes them a lucrative offer. In Hollywood, money never sleeps.

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Construction jobs don't last either, but does that mean we're going to stop building infrastructure? Some industries are by their very nature transient, and you want to keep those industries in your state by making an economic climate attractive to them.