Joe Kristan at the Tax Update blog has a very negative opinion of a tax break passing the Iowa House for the film industry ("Harold Hill Gulls The House"):
Like rubes rushing the patent medicine wagon, the Iowa House almost unanimously voted for a rich special interest giveaway for the film industry yesterday. By a 95-1 margin the House approved HF 892 to provide a 50% subsidy to film projects, and then some:
- A 25% tranferable tax credit for expenditures on a film project;
- A 25% credit for investors in film projects; and
- a tax exemption for sales of goods and services to film projects.
Because the credits are transferable, the filmmakers can sell them to finance their projects. This feature makes this tax credit a subsidy, rather than just a tax break.
If it weren't tax season, I would spend more time pointing out just how absurd this thing is. Why is this one industry - an itinerant one that leaves nothing behind but empty fast food wrappers - somehow worthy of being subsidized by every other business? The standard line about how much the filmmakers bring to the economy can be said about any business - more so, in fact, about the ones that stay here and provide permanent jobs, and who end up paying for this subsidy.
I'll bet you anything that most other states are passing these sorts of breaks/subsidies using the same bogus promotion.
Here's an incomplete rundown of subsidies that a blogger compiled last July. It looks like Iowa was trying to one-up Illinois.
Here's also a recent story in the Chicago Tribune on Wisconsin's efforts.
And don't forget that a couple years ago President George W. Bush's then-unused veto pen didn't stop this.
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