Hollywood's Corporate Welfare Hypocrisy
The American film and television industries take advantage of billions of dollars in tax incentives doled out by local governments. Where producers and politicians see investment, Allysia Finley of The Wall Street Journal sees shameless corporate welfare.
What's the Latest?
When the phrase "corporate welfare" gets tossed around, our minds often wander toward "too-big-to-fail" banks and publicly-financed sports stadiums. But what about the fat cats who run Hollywood? Allysia Finley of The Wall Street Journal:
Media companies nab about $1.4 billion annually in tax incentives that 40 states offer for TV and film production, according to a report this year by the California Legislative Analyst's Office. Most provide either rebates or tax credits that offset a percentage of their production costs.
Finley makes sure to point out that The Wolf of Wall Street, a film that disparaged financial greed, had 30% of its post-production and below-the-line costs covered by New York taxpayers. The film grossed $400 million at the world-wide box office on a budget of only $100 million.
What's the Big Idea?
The popular counterargument is that an investment in something like The Wolf of Wall Street brings jobs to New York residents and pays dividends to local businesses. While at least a few outlets seem to support that theory, others believe the return of those investments are more similar to economically disastrous publicly-financed sports stadiums.
Finley's article focuses on the hypocrisy of "Hollywood liberals" who decry corporate greed in their movies and TV shows while at the same time taking public money to fuel their productions. These include The Daily Show with Jon Stewart and Late Night with Jimmy Fallon, who both took advantage in 2010 of subsidies to shoot in North Carolina.
She goes on to recount instances of film and TV producers strong-arming local governments for additional tax credits. House of Cards famously extorted an extra $11.5 million from the state of Maryland to supplement the $26 in tax incentives it initially received for its first two seasons.
The big question is whether these subsidies end up paying off. Finley doesn't think so, and she's got sources that back her:
But as California's Legislative Analyst Office (LAO) has pointed out, "these subsidies give businesses in the motion picture industry an economic advantage that other businesses do not receive." As a result, "all other businesses and taxpayers effectively pay a higher tax rate than they would otherwise." While Hollywood claims these credits pay for themselves by increasing in-state spending and goosing tax revenues, the LAO concluded that each $1 of tax credit returned only 65 cents in revenues to the state.
Read more at The Wall Street Journal
Photo credit: Fer Gregory / Shutterstock
Swipe right to make the connections that could change your career.
Swipe right. Match. Meet over coffee or set up a call.
No, we aren't talking about Tinder. Introducing Shapr, a free app that helps people with synergistic professional goals and skill sets easily meet and collaborate.
Research by neuroscientists at MIT's Picower Institute for Learning and Memory helps explain how the brain regulates arousal.
The big day has come: You are taking your road test to get your driver's license. As you start your mom's car with a stern-faced evaluator in the passenger seat, you know you'll need to be alert but not so excited that you make mistakes. Even if you are simultaneously sleep-deprived and full of nervous energy, you need your brain to moderate your level of arousal so that you do your best.
A disturbing interview given by a KGB defector in 1984 describes America of today and outlines four stages of mass brainwashing used by the KGB.
- Bezmenov described this process as "a great brainwashing" which has four basic stages.
- The first stage is called "demoralization" which takes from 15 to 20 years to achieve.
- According to the former KGB agent, that is the minimum number of years it takes to re-educate one generation of students that is normally exposed to the ideology of its country.
When these companies compete, in the current system, the people lose.
- When a company reaches the top of the ladder, they typically kick it away so that others cannot climb up on it. The aim? So that another company can't compete.
- When this happens in the pharmaceutical world, certain companies stay at the top of the ladder, through broadly-protected patents, at the cost of everyday people benefitting from increased competition.
- Since companies have worked out how to legally game the system, Amin argues we need to get rid of this "one size fits all" system, which treats product innovation — "tweaks" — the same as product invention.
SMARTER FASTER trademarks owned by The Big Think, Inc. All rights reserved.