Your Tax Dollars At Work – Subsidizing Hollywood

January 4, 2012

When Hollywood producers make movies, they disrupt local businesses, demand (and get) discount pricing, then leave, creating no permanent jobs.

So why is this considered “economic development,” worthy of tax credits so large that Hollywood producers not only end up paying no taxes, they are able to sell off the credits and make a profit – at the expense of those of us who actually pay taxes?

Such is the case here in Massachusetts, where movie and TV producers sold at least 96% of the $265 million in tax credits they received between 2006 and 2010, according to The Boston Globe. So they’re not only not paying taxes in Massachusetts … they’re making a profit off of their tax credits!

Of course, it’s not just Massachusetts that rolls out the red carpet for Hollywood. As a result of the new fiscal cliff agreement, working Americans will be giving up 2% of their income because President Obama and Congress allowed the payroll tax break to expire; yet they renewed a $248 million tax credit for Hollywood as part of the agreement.

Then there’s California, which recently renewed a $100 million tax credit for Hollywood, just after approving Proposition 30, a mega-tax increase that raised state income taxes as high as 13.3% for the big-spending, cash-strapped state.

Not surprisingly, Proposition 30 passed with strong support from Hollywood’s finest, including Barbara Streisand (net worth: $340 million) and Rob Reiner (net worth: a mere $165 million).

Hollywood doesn’t create new technology, new drugs or many new jobs, for that matter. It doesn’t help the poor or the environment. It is an entertainment business in which a chosen few become very wealthy and everyone else barely ekes out a living (the median weekly earnings of non-supervisory film industry workers in 2008 was $627).

So why, in these fiscally tough times, are we giving Hollywood tax breaks? Could events such as George Clooney’s fundraiser than brought in $40,000 a person for President Obama’s re-election campaign have anything to do with it?

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