Near-Bankrupt California Awards Hollywood $100M In Corporate Welfare
Remember folks, trickle-down economics only works in the entertainment business.
Remember folks, tax cuts for the rich are evil, unless they go to rich people in Hollywood.
Remember folks, big business is greedy and corrupt and evil -- except for the big business of Hollywood.
In product, spoken word, and political endorsement, Hollywood assails itself without naming itself. Tax cuts for me but not for thee, and now taxpayers in the near-bankrupt state of California are on the hook for a cool $100 million that will feather the nest of movie stars, fat studios, and gajillioniare producers everywhere:
The California state Assembly Appropriations Committee has unanimously approved a bill extending the state’s film and television tax credit program for an additional two years, the LA Times reports. The current extension of the program that allocates $100 million yearly in credits expires next year.
This comes just two days after a left-leaning group in Louisiana complained about how the $1 billion in corporate welfare that state's doled out to Hollywood's 1% has benefitted no one but Hollywood's 1%:
The left-leaning Louisiana Budget Project suggests state lawmakers should put tighter limits on the generous film tax break program, lessening the credits offered and capping the amount of money it can cost the state each year.
"Unfortunately, the returns to the state on this investment, like many of the movies made here, have been a flop. While the subsidies have helped create film industry jobs that weren't here before, many of these positions are temporary and have come at a steep cost to taxpayers," budget analyst Tim Mathis wrote in his report. …
"What has the state received for all this investment? The short answer: Not much," Mathis wrote.
The idea of reducing taxes on business, especially during a recession, is a good one. The freeing up of capital has worked time and again to help end economic downturns and increase hiring. This philosophy doesn’t work, though, when you have the government cherry-picking specific industries that will benefit and controlling their behavior through the qualifiers that always go with "tax credits."
This is just the opposite of the government getting out of the way of business and the free market -- it's really just another form of government micro-managing, which never works.
But Hollywood's Top 1% is a powerful and attractive lobby, which is why they're able to legally steal from taxpayers.
Over at Instapundit, Glenn Reynolds has picked up on the theme of "Repeal the Hollywood Tax Cuts" and wrote a recent column that lays open just how much money this industry steals from hardworking, middle class taxpayers:
The first such proposal would be to restore the 20 percent excise tax on motion picture theater gross revenues that existed between the end of World War II and its repeal in the mid-1950s. The campaign to end the excise tax had studio executives and movie stars talking like Art Laffer, as they noted that high taxes reduced business income, hurt investment and cost jobs.
The movie excise tax was imposed in response to the high deficits after World War Two. Deficits are high again, and there's already historical precedent. Of course, to keep up with technology, the tax should now apply to DVDs, downloadable movies, pay-per-view and the like. But in these financially perilous times, why should movie stars and studio moguls, with their yachts, swimming pools and private jets, not at least shoulder the burden they carried back in Harry Truman's day -- when, to be honest, movies were better anyway.
For extra fun, they could show pictures of David Geffen's yacht and John Travolta's personal Boeing 707 on the Senate floor. You want to tax fat cats? I gotcher "fat cats" right here! Repeal the Hollywood Tax Cuts!
You'll want to read it all.
In general, I'm opposed to all tax credits and loopholes, and other than charity, all write offs. These are the mechanisms through which both parties corrupt the system. Lobbyists and special interest groups fight to carve out something special for themselves in our byzantine tax code, which on its face is unfair to those of us who can't afford lobbyists. That this breeds political corruption is without question.
And whether it's what kind of car you buy to where a movie is filmed, tax credits also give government the power to control our behavior -- which makes my skin crawl.
You flatten the tax and fix tax rates equally for all and a lot of problems will go away -- which is why it will never happen. Too many pigs at the trough and too many politicians benefitting from those pigs.
And Hollywood is one of the biggest, fattest, and most hypocritical pigs of them all.
Follow John Nolte on Twitter @NolteNC