Tax Breaks for Hollywood
A Parade article this past Sunday titled Tax Breaks for Films Gets Mixed Reviews, discusses the argument of whether states should offer tax breaks and other incentives in order to get production companies to shoot movies and TV shows within their borders.
In 2002, just five states offered such discounts; today, that number has grown to 44. Michigan offers one of the most generous tax credits in the nation, equaling 42% of production costs. In 2009 the state gave away $48 million, and this year is expected to pay out $198 million. (Keep in mind that Michigan is facing an overall estimated budget shortfall of $700 million.) In an analysis by the Associated Press, all states gave away a total of $1.8 billion in incentives to Hollywood between 2006 and 2008.
Those arguing against these tax credits say that money should be spent on areas where the budget is being cut back, such as education and roads. Supporters of the tax breaks say that they help boost local and create jobs. A few states, such as New Mexico, have been able to turn a profit, but the majority of states do seem to lose money with these incentives.
So, do you think that states should continue to offer such tax breaks for Hollywood? Should these programs be restructured? Or do you think they should just be done away with altogether?