States should avoid falling for the glitz and glam of attracting rich film-makers and movie stars to walk down the “red carpet” with them through the use of shoddy tax policy.
It is deceitful and simply wrong for legislators to spend millions of dollars to attract short-term jobs and artificial economic growth while at the same time asking taxpayers to pay more taxes to fill budget deficits. So-called “economic development” schemes such as film tax credits, state-owned golf courses and publicly financed stadiums are nothing more than flashy pork projects.
Nearly every independent study has shown film subsidies are lucky to bring in even a fifth of the tax revenue spent on them.
As a matter of sound tax policy, states should avoid manipulating the tax code to favor the movie industry … or any other industry for that matter.
The best way to promote economic growth is for states to eliminate these Hollywood subsidies, rein in spending and craft a low-rate, nondistorting and broad-based tax system.
— John Nothdurft, The Heartland Institute, Chicago
This letter was originally published in The Houston Chronicle.