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WSJ major opinion piece on film industry welfare--quotes Jindal
Posted on 6/21/14 at 2:27 pm
Posted on 6/21/14 at 2:27 pm
You boys shoot that messenger. After years of catching hell here telling you the same thing this piece tells you I can't wait to see the criticism you hurl at the largest, arguable the most respected publication in the business and finance world.
(Do any of you think Jindal a conservative now?)
Hollywood Teaches Wall Street a Lesson in Corporate Welfare
Some exerts for you:
(Do any of you think Jindal a conservative now?)
Hollywood Teaches Wall Street a Lesson in Corporate Welfare
Some exerts for you:
quote:
Hollywood liberals like to savage corporate America as greedy and mendacious. Consider their portrayals of big business in such recent films as "The Company Men," (2010), "The Promised Land" (2012), and "The Wolf of Wall Street" (2013). But here's a dirty little secret: The film and TV industries have colluded with politicians to pick the pockets of taxpayers on a grand scale.
Media companies nab about $1.4 billion annually in tax incentives that 40 states offer for TV and film production, according to a report this year by the California Legislative Analyst's Office. Most provide either rebates or tax credits that offset a percentage of their production costs.
quote:
Louisiana in 2009 dressed up its tax credit to poach production from California and New York. Tax-credit spending has since soared to $251 million annually from $101 million in 2009, according to the Louisiana Entertainment office. Among this year's beneficiaries are "Fantastic Four," "Terminator 5," and "Pitch Perfect 2." (Like most states, Louisiana doesn't condition subsidies on production quality.)
"Instead of just letting other states beat us and take our jobs, we made a commitment to strengthen our entertainment industry and make it bigger and better," Republican Gov. Bobby Jindal crowed in 2012.
Herein lies another little secret: Some of Hollywood's biggest clients are Republicans. More than half of the 40 states that offer tax incentives are governed by Republicans, and most of those are controlled by GOP legislatures.
Last year, New Mexico's GOP Gov. Susana Martinez signed legislation masquerading as a "tax reform" that enhanced the state's production incentives. Locals called it the "Breaking Bad" bill after the AMC AMCX -1.29% series that was filmed in Albuquerque.
Just last month, Republicans in the California Assembly voted unanimously with Democrats to expand the state's incentive program. "This is an iconic industry, this is an industry that is worth fighting for," said California Assemblyman Tim Donnelly, a tea party favorite who narrowly lost his primary bid for governor this month. "Having more people working is a good thing."
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." While Hollywood claims these credits pay for themselves by increasing in-state spending and goosing tax revenues, the LAO concluded that each $1 of tax credit returned only 65 cents in revenues to the state.
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.
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.
9
Posted on 6/21/14 at 2:32 pm to I B Freeman
dude its saturday, go have some fun (unlike some of us that are stuck studying biochem, hungover 
)
)Posted on 6/21/14 at 2:33 pm to I B Freeman
I don't have a problem with the concept of a tax credit but one thing that makes the film industry "unique" and I believe needs to be fixed is that the credits should only apply to the revenue actually used in the state for filming and production purposes.
Unless it's been changed, the Louisiana credits apply to the entire production, even the portions where the work was done out of state.
Now, the problem is that other states offer the same so if Louisiana plays hardball, they could potentially lose everything.
Unless it's been changed, the Louisiana credits apply to the entire production, even the portions where the work was done out of state.
Now, the problem is that other states offer the same so if Louisiana plays hardball, they could potentially lose everything.
Posted on 6/21/14 at 2:39 pm to I B Freeman
If we all just said we agreed with you, would you stop making these threads???
Posted on 6/21/14 at 2:40 pm to I B Freeman
Time to do the laundry...
Posted on 6/21/14 at 2:48 pm to I B Freeman
WSJ rabble rabble rabble rabble rabble rabble rabble rabble rabble rabble Jindal rabble rabble rabble rabble rabble rabble Film tax credits rabble rabble rabble rabble rabble rabble rabble rabble Mr. Hanky the Christmas Poo rabble rabble rabble rabble rabble.
Why must we do this every day?
Why must we do this every day?
Posted on 6/21/14 at 2:56 pm to I B Freeman
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.
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.
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.
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.
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.
quote:
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."
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.
quote:
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.
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.
quote:
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.
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.
This post was edited on 6/21/14 at 2:58 pm
Posted on 6/21/14 at 4:34 pm to I B Freeman
How is a tax credit "spending"?
Posted on 6/21/14 at 5:02 pm to I B Freeman
So you don't know how much, if any, actual checks were written from the state?
Posted on 6/22/14 at 8:25 am to I B Freeman
I know trolling IB on this issue is somewhat of a spectator sport on this board, but quite frankly I'm surprised more posters aren't mad as hell that the state forks over a quarter billion dollars annually to Hollywood. I suppose all of you Rand Paul fans aren't as big into economic freedom as you claim.
To date, I haven't seen anyone persuasively refute anything IB has posted on the issue of film credits, mostly because the issue really is shameful. How many of you would be okay with government giving your neighbor a check for 30 cents of every dollar he spends (regardless of whether or not he actually incurs an income tax liability) while forcing you to pay your "fair share" just because your neighbor works in a profession that government favors?
One Question / One Observation:
1) What makes the film industry so special and so magical that it deserves to have 30% of it's operating costs subsidized by Government? Is Hollywood better at creating jobs than, say, shipbuilders, oilfield services companies, banks, or any other industry?
2) I would really like to see Hollywood's most-pious liberals - Matt Damon, Lena Dunham, Alec Baldwin, George Clooney, etc - REFUSE to work on films that receives taxpayer subsidies. Or, better-yet, if their film receives taxpayer subsidies, voluntarily over-pay an amount equal to those subsidies in fed & state taxes so those dollars can be "invested" by government in education and the other wonderful ways that government spends $$$. After all, liberals unanimously believe government can best solve all of society's ills only if it had "enough" of our money, so it's time for our high-minded betters to put up or shut up.
To date, I haven't seen anyone persuasively refute anything IB has posted on the issue of film credits, mostly because the issue really is shameful. How many of you would be okay with government giving your neighbor a check for 30 cents of every dollar he spends (regardless of whether or not he actually incurs an income tax liability) while forcing you to pay your "fair share" just because your neighbor works in a profession that government favors?
One Question / One Observation:
1) What makes the film industry so special and so magical that it deserves to have 30% of it's operating costs subsidized by Government? Is Hollywood better at creating jobs than, say, shipbuilders, oilfield services companies, banks, or any other industry?
2) I would really like to see Hollywood's most-pious liberals - Matt Damon, Lena Dunham, Alec Baldwin, George Clooney, etc - REFUSE to work on films that receives taxpayer subsidies. Or, better-yet, if their film receives taxpayer subsidies, voluntarily over-pay an amount equal to those subsidies in fed & state taxes so those dollars can be "invested" by government in education and the other wonderful ways that government spends $$$. After all, liberals unanimously believe government can best solve all of society's ills only if it had "enough" of our money, so it's time for our high-minded betters to put up or shut up.
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