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It's a bad idea even when they aren't looting

September 02, 2010

Tax Policy Blog on the resumption of Iowa film credits in the wake of the film scandal:

Because of this scandal Iowa temporarily stopped shamelessly handing out cash to filmmakers, but the gravy train is up and running again. Iowa lawmakers have not learned the broader lesson: film tax credits should be eliminated permanently because they are terrible tax policy. One of most egregious forms of corporate welfare, film tax credits take money from the taxpayers and funnel it to filmmakers. The claims of economic benefits and job creation are greatly exaggerated (assuming you can even call a job shifted from one state to another a job "created") and ignore the opportunity cost of such tax expenditures (like funding essential government services, or reducing taxes). Film tax credits are yet another example of a politically well-connected special interest group securing subsidies for itself at the cost of the rest of the state's taxpayers and businesses.

Yes, even if the film program isn't buying Benzes and Ipods for film producers, it's still a bad idea. Yet there may be a silver lining. Iowa Film Insider reports:

I received the following from a good friend who is well-connected in the Iowa film world. Here is that person's message to me today:
Everything is still moving along, but Dotzler is having a hard time getting the other legislators on the tax credit committee to agree on a date. I think that Governor Branstad's move to reinvent IDED has everyone very cautious. It has become a waiting game, I'm afraid.

All of the films that had a contract or an approved application have been called by non-state employees. All had various answers, but to your question on if we are going to see any films shot - No - they have moved on to other states to shoot or have scraped the project.

For now, anyway, it's easier for Hollywood to gull other states, making it harder for Senator Dotzler to give away your tax money.

Related: Let them eat canapes.

Tags: corporate welfare.Dotzler.Economic development.film credits.harold hill.