A Bad Idea That Deserves A Quick Death
80,000 jobs and $4 billion-with-a-B in wages is nothing to sneeze at. For a 20 to 30% discount on their state income taxes, filmmakers, television producers and video game companies do their respective things in Georgia, and NOT in places like North Carolina, Louisiana, or Michigan.
That tax break translated into 245 feature film and television projects, $2.2 billion-with-a-B in direct spending for an economic impact of $7 billion, in Georgia, this year. The entertainment industry has started to blossom in Georgia and as much fun as celebrity-spotting may be, it’s more important to make the sector a permanent part of Georgia’s economy.
So when Celeste Headlee notes that Americans for Prosperity has successfully killed off similar tax incentives in Florida, and is now targeting Georgia’s, it’s important we notice those 80,000 jobs. Rick Harris has one of them, and employs about 13 others.
So remember that in the upcoming legislative session, if you hear any talk about government “picking winners and losers,” especially for “Hollywood elites.” It’s not Tom Cruise getting the tax breaks, it’s an industry that employs Georgians like Rick Harris.
As production company head Craig Miller, who also sits on the Georgia Film, Music and Digital Entertainment Advisory Commission, says: “The incentive actually drives work here… by offering these people (in California and New York) the incentive to come here and create jobs -and not just “movie jobs,” permanent support jobs that wouldn’t be here if it wasn’t for the incentives.”
After keeping its citizens safe, government should be about creating the necessary conditions to let them earn a living and become self sufficient. Georgia’s film tax credit is doing exactly that.
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Mike Hassinger
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I was in New Orleans for Thanksgiving and was shocked to see one yellow film sign. I was shocked because I didn’t even expect to see one sign, as Bobby Jindal did a real good job of killing the film industry in New Orleans. For a while, Louisiana was the biggest filming state in the US; currently, three projects are being filmed in the state.
I also visited with a friend who followed the industry to New Orleans a few years ago. She worked in set decoration – I use the past tense because she hasn’t worked in set dec in more than six months. Most of her colleagues have either gone back to LA or are up here in Atlanta. Bobby Jindal is a cautionary tale for many reasons, but his evisceration of the film industry at a time when the oil industry was also tanking has devastated Louisiana’s economy in a way that’s going to be difficult to reverse.
Georgia’s lawmakers need to remember that it doesn’t matter if Marvel has studios here or if Tyler Perry wants to build his own megalopolis – take those incentives away, and those jobs vanish, along with all the economic reverberations o that ripple through the communities that are home to film projects. Restaurants, retail, professional services, real estate – it’s easy for lawmakers to ignore the breadth if this industry’s impact. I hope they don’t.
With at least 10 states already succumbing to Tim Phillips and his anti-prosperity gang backed by the Kochs, Georgia should flip him the bird while doubling down on initiatives to attract even more film industry projects.
No problem extending the industry a sweet deal to reduce corporate state taxes to even zero. But when it is a taxpayer subsidy beyond zero plus providing a sellable credit it is wrong.
Jobs ? End their state income tax too rather than pump more money to those that know how to work the system.
Nice talking points straight out of talk radio, with no basis in how Georgia actually finances itself.
The “eliminate the state income tax” is an especially ignorant chant from someone that spends as much time here as you do. That’s half the state budget. Our sales tax rates are already approaching some of the top in the country, and replacing the income tax with sales taxes would put us well into the top spots across the board. Conversely, cut that amount of state spending and you’ve gutted education, health care, and public safety. That’s not going to do much for jobs/economic development, where companies that want to relocate look at schools and health care access and cost as two of their top factors (for jobs that pay higher than average wages, they are often more important in scoring than tax environment).
It makes a lot of people feel good to say crap like this, because they’ll never be close enough to actually have to be responsible for the consequences if someone actually did it.
I believe we were talking about the film industry and my concern was finding a stopping point at zero even if it spilled to employees, thus “end THEIR” tax…..completely or partially as needed). Did not advocate total income tax elimination but while on it, it could be reduced with a more broad based sales tax.
80,000 jobs? I think that is stretching it a bit but whatever…..It would be interesting to see the hard data about just what kind of job those are…..
The real fact is when you give tax incentives you are picking winners and losers. Targeting specific industries for tax breaks is a catch 22 for communities. You can do it and reap the benefits until another community offers a better incentive. Once that happens you lose because the type of industry you attracted with tax incentives hasn’t stopped looking for more and better incentives.
South Bend thought they had a permanent attraction with the college football hall of fame as well as the city of Kings Mill Ohio and now they are trying to sell an expensive taxpayer backed facility no one wants. I believe the South Bend mayor warned us that Atlanta too would lose the attraction just like they did one day.
If you live by tax incentives be prepared to die by better incentives offered elsewhere.
Every tax or regulation or law picks a winner and loser. That’s a reality, despite the intellectually lazy argument that “we don’t pick winners and losers”. If we’re going to have taxes, regulations, and laws, we do. Period.
there are some checks and balances that mitigate the whole “race to the bottom” argument around tax incentives. supply and demand in the relevant markets, public tolerance, and at some point, evaluation data, all act to test whether the tax incentives yield a net positive expenditure/investment. it is arguable that the “bottom” is exactly the point of market equilibrium.
As long as the economic impact is greater than the tax break, why would we want to end it? Hell, let’s find more incentives that can do the same!
The film industry is world class with financial spider webs and most legislators and committees can’t escape them, even Icarus. But while we should do all we can to encourage spiders in our garden, we should heed financial red flags.
Opposition to turning fuzzy math into public script a company can sell rather than stopping at zero due or a carry forward, is not opposition to income taxes nor anti-business.
Georgia revenue consists of 50% personal taxes and 5% corporate taxes making the reward tilt clear and usually beneficial at some public cost.
Finding a path to eliminate the corporate tax may be best and even financially preferred to the operational structures in place to reward.