New York recently announced ‘Amazing Spiderman 2’ will be filmed entirely within the state. A car chase scene will be shot in Rochester. While it’s cool to envision Spiderman chasing bad guys around the Inner Loop, we might wish this production stayed in Hollywood.
‘Spiderman’ will qualify for state tax credits that can shave 30 percent off production costs. If the tax credits exceed the amount in taxes owed, the movie gets a refund check. New York’s tax credit program will cost $420 million this year. Do you know who pays for these tax credits? We do.
What’s the benefit?
The Tax Foundation says we don’t get much in return. The group found taxpayers get back less than 30 cents for every dollar of spending. The jobs created are mostly temporary and given to nonresidents.
Massachusetts found its film tax credit program cost more money than it brought in and created very few jobs. A Boston Globe columnist writes:
The Massachusetts film tax credit program has been a flop, a taxpayer rip-off that enriches one of the nation’s most profitable industries while choking off funds from more pressing public needs….
Film tax credits are based on a kind of voodoo economics — a faith that the more revenue the state manages to lose to Hollywood, the better off the public will end up. “Lawmakers understand that cutting income tax rates from 6 percent to 5 percent will cost the state revenue,” economics writer Josh Barro observes, yet they imagine “that cutting the tax rate on film productions to negative 25 percent or 40 percent can pay for itself.”
Yet, New York lawmakers are about to pass a budget that ups tax incentives to 40 percent for Upstate productions. It’s long past time the state do a serious, independent cost-benefit analysis of this program. But that’s not likely, since the state won’t even break down where the tax credit money went.
Links of the Day:
– Batavia firefighters get probation for acting as bookies. The cop investigating them placed bets.