SB 1640 which will give the film industry hundreds of millions of taxpayer funded tax breaks when they produce a film in Florida, passed the Governmental Oversight and Accountability Committee in the Florida Senate yesterday, March 26, 2014. An estimated 250 people from the entertainment industry descended on Tallahassee yesterday to entice law makers as to the merits of giving them the tax handouts. We should have gone over to the Tallahassee Regional Airport to see how many private jets were there for the day.
It is unclear if they were handing out the objective facts of the corporate welfare legislation, or industry propaganda to move the bill forward. Multiple studies on the impact of these taxpayer funded handouts have been done and most recently the Tax Foundation found the following to be true:
- Film tax credits cost states revenue and require either higher taxes or lower government spending elsewhere
- At best, film tax incentives largely shift production from one sector to another without producing a net increase in economic activity or employment
- However, the program is unlikely to produce a self-sustaining state film industry
- Content restrictions raise concerns about censorship
The bill, if signed into law, would greatly ramp up taxpayer handouts to millionaires and billionaires in the entertainment industry and yet there is word coming out of yesterday's meetings, this only wet their appetite for a free ride on the taxpayer dime. Some are already talking about quadrupling the $300 million tax break grab in future legislative sessions.
An analysis by the Reason Foundation last year found more states should suspend their tax incentive programs for the film industry and treat all industries the same. Meaning offering all business the same tax incentive, whatever that is to be more competitive overall with other states, rather than having politicians pick the winners and losers.
In a scathing report last year, U.S. News & World Report offered the headline "How Hollywood Is Ripping Off Taxpayers". One of the examples cited in that article found:
"In 2011, the state [North Carolina] awarded $30.3 million in film credits – reimbursing productions that spent over $250,000 up to 25 percent for qualifying expenses. Yet, the program could only claim about 55 to 70 new jobs. Based on their model, the report claims that if instead North Carolina's business taxes had been reduced across the board by $30.3 million, between 340 and 450 jobs and $14 million in personal income would have materialized."
Libertarians see it the same way objective policy analysts see it, treat everyone and every corporation the same. Do not hand out specific tax breaks or incentives to certain businesses while not offering them to others. It is unfair and is anti-free market reeking of crony capitalism. The Libertarian Party platform states, in part, "We oppose government subsidies to business, labor, or any other special interest. Industries should be governed by free markets."