Film incentives: A bad idea that won’t die
Film incentives are back in the news. New Jersey Governor Chris Christie has pulled the plug on a $420,000 credit for Jersey Shore, a popular but controversial “reality show” that follows the lives of several raucous young adults living in New Jersey. The governor reasons that New Jersey’s taxpayers shouldn’t be forced to support a show that “perpetuate[s] misconceptions about the State and its citizens.” That’s a polite way of saying Jersey Shore makes New Jerseyites look like a bunch of self-indulgent, barely literate nitwits.
That’s a fine reason for abolishing film tax credits.
Another reason – and a more important reason – is that they don’t work.
The argument for film incentives is that they create jobs. But as analysis published by the Policy Council demonstrates, there’s no evidence that these taxpayer-funded giveaways are good investments – and plenty to suggest they’re not.
- For every dollar South Carolina invests in film incentives, the state’s general revenue fund loses $.81. In other words, we make 19 cents on every dollar invested.
Nonetheless, South Carolina lawmakers press ahead with film incentives. This year’s Best & Worst highlights a bill (S.49) that would have increased payroll tax breaks for film producers from 15 percent to 20 percent, and would have doubled rebates on in-state purchases made by film production companies. The bill failed, but lawmakers added the expansion in the form of a proviso anyway.
That’s in addition to the other publicly funded favors we offer to the film industry. Consider:
- A 20 percent rebate on wages paid to actors and production personnel who are subject to the state income tax.
- A 30 percent refund on goods and services purchased from South Carolina merchants.
- Exemption from sales tax.
- And income tax credits.
Nor, by the way, should we forget how many bad movies South Carolina taxpayers have helped fund over the years. It’s not just Forrest Gump and Full Metal Jacket. As The Nerve reported several months ago, taxpayers have given their blessing to scores of “classics” like:
- Nailed – a film so bad it never got to the production phase.
- Death Sentence – surely one of Kevin Bacon’s worst efforts.
- Ace Ventura: When Nature Calls – the title says it all.
- Head Cheerleader, Dead Cheerleader – should we keep going?
The strongest argument against film incentives, though, isn’t the godawful movies. It’s that they don’t work.