Hollywood wants "$400m a year" from the California taxpayer

Hollywood, legendary home of creative accounting, wants a new round of subsidies. David Sirota at Pando Daily:

Now that California has a budget surplus, the question for the state’s lawmakers is pretty simple: Should they use all the new money to reverse recession-era cuts to social programs. Or, should they spend up to $400 million a year of the new resources on more taxpayer handouts to the film industry? Yesterday, 59 California state legislators called for the latter, sponsoring a bill to increase tax credits to the film and television industry. Call it yet another Hollywood heist, this one engineered with a double-shot of chutzpah.

Notable Replies

  1. They should be given a tax break for any film that isn't a remake or reboot, a prequel or a sequel.

  2. Tell Hollywood to take a hike. We need our bridges and roads fixed first or better mental health programs or help for the homeless and so forth.

  3. The difference in tax rates is not drastic enough for MGM or Paramount or Universal or any of the big players to close up shop and invest billions of dollars building new sound stages, recruiting new talent, etc.

    The entertainment industry isn't a single company that can relocate on a whim; losing "the industry" would mean untold numbers of TV studios, movie studios, executives, talent agents, actors, pre-production studios, post-production studios, special effects studios, sound studios, marketing agencies and such would have to embark on a mass-migration. And for what? Hollywood can blow $400 million on two big-budget action movies.

  4. Governments paying industry to stick around is never a good idea, as it causes the companies to act in whatever way maximizes their take of the subsidies, instead of trying to be profitable by improving efficiency and the like. Also, if the terms and conditions of the subsidy aren't strict, the companies will take the money and run. And if the money every dries up, they'll just take off anyways, because the money was the only reason they were there in the first place. Atlantic Canada has been trying to attract businesses using this method for many moons, and it has never paid off.

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