Saturday, February 23, 2013

The Hollywood Tax Story They Won't Tell at the Oscars

Hollywood Elite Celebrate Oscars ... Tax Breaks, Too - Matthew Auerbach/Newsmax

With the 85th annual Academy Awards coming up Sunday, Hollywood has every right to feel good about itself. Last year marked the first rise in ticket sales since 2009, which accounted for a record take of $10.8 billion.

Ticket buyers aren’t the only ones forking money over to the film industry.

Glenn Reynolds’ column in the Wall Street Journal outlines the overwhelming number of states providing tax incentives to moviemakers as a way of attracting them to their neck of the woods to make their latest masterpiece.

It's easy to demand higher levies on the 'rich' when your own industry gets $1.5 billion in government handouts. - Glenn Reynolds/Wall St. Journal (Instapundit)

With campaign season over, you're not likely to hear stars bringing up taxes at this weekend's Academy Awards show. But the tax man ought to come out and take a bow anyway. Of the nine "Best Picture" nominees in 2012, for example, five were filmed on location in states where the production company received financial incentives, including "The Help" (in Mississippi) and "Moneyball" (in California). Virginia gave $3.5 million to this year's Oscar-nominated "Lincoln."

Such state incentives are widespread, and often substantial, but they don't do much to attract jobs. About $1.5 billion in tax credits and exemptions, grants, waived fees and other financial inducements went to the film industry in 2010, according to data analyzed by the Center on Budget and Policy Priorities. Politicians like to offer this largess because they get photo-ops with celebrities, but the economic payoff is minuscule. George Mason University's Adam Thierer has called this "a growing cronyism fiasco" and noted that the number of states involved skyrocketed to 45 in 2009 from five in 2002.