Artwork by Steven E Gordon.
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The latest news from the realm of entertainment tax breaks is that London and Michigan have reaffirmed their commitment to tax incentives designed to lure production to their corners of the world. Entertainment tax incentives are all the rage these days. People are convinced that without them, Hollywood will find more "lucrative" pastures to host production work.
What astounds me is how little tax payers understand where the incentive money is going and how much they believe those incentives are actually helping their cities.
The basic premise of the tax credits sounds logical: incentivize Hollywood conglomerates making the films to come to your locale, and seed an industry that wasn't previously there. Films are made all the time. Bringing the production work to your constituents means more employment, more local revenue, and happier voters.
But, once one region benefits from paying Hollywood to play inside its borders, other regions take notice. They initiate incentives that offer more than their neighbor to win the next contract. Then, the other state takes notice and does the same.
.. and so on, and so on.
Every state in our nation now has some kind of incentive. Each state is vying for the same piece of the hollywood pie and by working against each other. Who is really benefiting in the race to be the place with the biggest kick-back? More importantly, who is paying the studio to be there?
Another important factor? The labor force that is brought in to do the work. Production companies regularly bring workers from other states when they make their movie in IncentiveLand. This is prevalent in the visual effects industry. VFX shops have opened satellite locations in areas that offer tax incentives so they can be awarded jobs that pay the hollywood studio a tax credit for having the work done at that location. These satellite locations are staffed mostly by artists from elsewhere as the demand for work done exceeds the amount of local talent available.
born visual effects artist David Stripinis tweeted on the anniversary of his working in London:
Two years ago today I left Los Angeles for what I thought would be one year. Now I don't think I'll ever get back. #fuckYouSubsidies
Regional tax incentives, paid by the local population, don't kick-start a local entertainment industry. Instead, these incentives drain municipal coffers to lure Hollywood studios in to temporarily squat in their provinces and make with the Movie Magic. Artists and craftspeople are flown in by production companies eager to be paid by the local population to do their work.
Then, when the work is done, they fly back to their lives and families in lands across the globe.
I'm reminded of the movie line from a supercomputer who tried to figure out the best way to win a Global Thermonuclear War
[It's] a strange game. The only winning move is not to play ..