“When intertwined with public funding through state and federal tax incentives, the practice of movie and television write-downs represents a troubling exploitation of taxpayer funds. Coupled with rapidly expanding state tax incentives, it represents a multibillion-dollar Rube Goldberg machine that culminates in a nickel being pulled from your pocket, strapped to an Acme rocket, and fired directly into the bank accounts of movie studios.”
@andrew@law It's an argument which needs to be had, especially because not all incentives are equal, but this argument may be more open to attack than we might want when gunning for such powerful interests.
i.e. the opportunity cost of not giving $1 in tax credits for $3 of incentivized spending is $3. Absent the incentive, the spending is $0 so the multiplier is 3 (not <0).
i.e. out-of-state workers are taxed in GA when their in-state income exceeds $5k.
Nope, you're not wrong. The counter-counterargument falls down when you introduce data that suggests the spending isn't $3 -- productions largely operate like a traveling circus, they bring their labor and stuff in, shoot the movie, and mosey on (even when they may maintain a physical presence in the form of a studio lot, etc.).
Same argument and data as is to be found regarding public funding for sporting venues. TLDR: The public ROI isn't there.
@andrew@law So, round numbers assuming 100% goes to wages of highly-paid out-of-state labor:
$1m in tax credits nets $3m in wages taxed at (round up) 6% nets only $180k in income taxes. Not great and certainly not the multiplier of 3 traditionally asserted. But the alternative isn't $1m in taxes, it's zero.
Didn't GA have to raise sales taxes to fund a stadium? And gift land? That's the kind of direct subsidy that would move film into the deficit category.
@andrew@law IDK f'all about Georgia. The BC film subsidies are all tied to in-province spending and exactly equal the taxes collected from each activity.
It's like the province says "we'll give you the income taxes your BC employees pay" or "we'll comp you the sales tax on your BC purchases".
Which pissed me off because I wish I could get that deal, but it is a net positive for the province.
The chain breaks here because studios typically owe very little in state taxes -- so much so that they don't even use the credits they receive from (for instance GA) to offset their own taxes. They sell them to folks that have enough of a bill to make use of them in full.
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