Screams of anguish from Brit animation companies:
The UK's animation industry is "scrabbling for crumbs, selling up and shipping off" because production companies cannot compete against tax breaks offered overseas, the companies behind Wallace & Gromit, Peppa Pig and In The Night Garden have warned.
Animation UK, which represents producers including Aardman Animations and Astley Baker Davies, has written to George Osborne, Chancellor, warning him that Britain is losing its best animation talent, and calling for tax breaks before the industry is wiped out altogether.
The sector is "not seeking handouts to get a competitive advantage", but needs to be able to compete with animators overseas, particularly Ireland and Canada, where tax breaks and funding supply up to 50pc of budgets and create "a distorted market place we cannot survive in", it said in a letter to be delivered to the Treasury today. ...
Let us face facts. Tax breaks for motion picture production are rampant around the globe.
Yesterday, a union rep for an IA live-action local said to me that television and movie productions have galloped away from L.A. in droves, going to where tax and other cost breaks are large and plentiful:
"Lots of shoots are now happening on the east coast. Atlanta has a lot of movie work going on. The place is hopping. " ...
And so it goes. The Los Angeles animation scene has been (somewhat) shielded from poaching and job shifting because Southern California is where a concentration of animation talent resides, and critical mass results in gravitational pull.
But this happy phenomenon will not necessarily last forever. Once upon a time, cities in Canada and other parts of the United States had a tough time fielding professional, competent movie crews, so work remained in L.A. That stopped being the case a long while ago.
When the cost differences and tax breaks get big enough, even established California animation studios could start saying ...
"Heeey now!"
Animators and tech directors are not all that different from their live-action brethren. They are just as likely to pull up stakes and "go where the work is" in order to survive, if and when that work travels elsewhere.
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29 comments:
It's already happening big time. Rhythm & Hues and Sony can't send people to Vancouver fast enough. DD seems to have pulled up stakes.
Sony has offered me a job if I go to Vancouver, that is a bit hard being I have a wife and kids. What is the union doing about keeping the work here? You guys love Jerry Brown yet he isn't smart enough to give out tax breaks. No one who runs this state is. If I make money here I will spend money here. Can we have the one union that gets the tax breaks going so that work comes back and stays here in LA?
Tax Breaks Benefit Conglomerates. That's always been the case. While the IA (as well as the rest of the entertainment unions) *did* lobby California for increased incentives, the decision was wisely made to not play a losers game.
Silly Rabbit... The Union cant do anything. "Thats just the way it is"... "Its always been like that"... yadda yadda yadda.
Silly Troll, study your history. Here's a topic .. the 839 strikes.
So why doesn't California give out the tax incentives like Canada does? It would make sense that if more people are employed in your state than those same people have money to buy houses, cars, etc and in the end the state is making money from taxes. Also the US as a whole should be behind this, more people employed the more tax revenue they see, people are happier. Most of us arent looking for the highest paying jobs around we are just looking for good on going jobs.
Would you vote to raise your taxes? Did you? The state is in enough financial trouble as it is. To match last year's 300 million in incentives the state offered would have taken a tax increase, which the voters would have to approve. How many people do you know that are eager to raise their state taxes?
I do vote and no I wouldnt vote for higher taxes even though enough idiots did b=vote yes a few years ago to raise our sales tax (still cant figure that one out). It comes down to budgeting and this state cant do it. In fact the US cant do it. Giving out incentives though would make them more money in the long run. Again, if I am making money in this state then I will be staying here and purchasing which in turn equates to tax dollars that the state receives. I could go on about why the state is in debt but we are all aware of that.
When I was in Canada, I had friends who worked at a small studio in Toronto whose back was broken by the tax credits, they had to hand it right over to the US Studio directly, it didn't go to the local economy. Discovery did the same thing in Quebec.
I doubt we would get a tax credit in California, the liberals would cry out that it's corporate welfare, and the conservatives won't want to support "liberal hollywood". So we're hosed either way.
"Steven Kaplan said...
Silly Troll, study your history. Here's a topic .. the 839 strikes."
Silly Collector of a Check on OUR Account:
Isn't that why IATSE took us off of the collective bargaining sessions, only letting us now be observers?
California can't give out tax breaks, the state is BROKE! And its getting deeper in debt everyday.
What should be done is that the studios should have to pay something like a USE TAX, when they send work out in order to save money, they pay it anyway back to the state for sending it out. (The USE tax is something we are liable for in place of the state sales tax we are all going to be saddled for shortly, it has to do with buying something out of state and our state wants a cut.)
Silly Collector of a Check on OUR Account: Isn't that why IATSE took us off of the collective bargaining sessions, only letting us now be observers?
Yep. Not sure how you're making an argument for tax incentives with your posts. Oh, that's right, you're just a troll.
I do vote and no I wouldnt vote for higher taxes
Didn't question if you voted, but glad to hear you do. And, you answered your own question. The state can't afford to give subsidies with money it doesn't have.
As for your "if we incentivze Hollywood to work here, the state benefits" argument, read my older post for a rebuttal.
6:00PM
I'm simply responding about your answer to Anony 9:56AM. And YOU were the one who brought the strike factor into the tax incentive post. Not sure why you'd question that.
Taxes in the U.S. are lower now than any time in 50 years. That's a nonnegotiable, irrefutable fact.
"So why doesn't California give out the tax incentives like Canada does?"
It does.
Can't start 2 wars and not ask American's for ANY sacrifice where Taxes are concerned. Especially when giving massive tax cuts to the wealthiest to stash overseas.
I'm simply responding about your answer to Anony 9:56AM.
No, you're just being a troll, poking your troll nose in to a convo you don't belong in.
But, to clarify, You stated there's nothing the union can do by quoting "Its always been like that" and such. I used the strikes to point out an example where something can be done, and its not the right thing to do.
Now, tying back to incentives, sure, we can do something. But, doing nothing is the right thing, since California already figured out that lowering the incentives it was offering (and hopefully ending them completely) is the wisest move.
Get it, Troll?
The problem is not tax revenue , it is spending!!!
100 Billion dollars hi speed rail that would do nothing
http://www.businessinsider.com/california-high-speed-rail-2011-11
Free college fro legal aliens
http://www.dailycal.org/2011/10/10/brown-signs-landmark-dream-act-legislation/
Lower our taxes , freeze the spending. The public unions (teachers...) are screwing this state.
Sounds like the smoke and mirror rantings of a fringe right nut.
Like Steve noted, is not just a question of tax breaks but also cost differences. However, cost of living for the employees should be factored in. What good do (tax breaks and lower costs) for to the potential employee if he cant afford a reasonable living somewhere else? And these days, with the norm being short term contracts, is even more of a predicament.
State spending is out of control too...
California is in no position to give out money it doesn't have, thats like the current white house spending 4 Trillion dollars in less than 1000 days of money it didn't have. And thats a good reason not to pass a budget because then you would actually have to limit your spending. Thats the strange thing about a budget I guess.
And the Right Wingnuts are all out in force....what would they do without Fox news and Rush telling them what to think....
"Stay on target" yes the line from Star Wars but can we stay on topic and not start attacking with the rightwing nutjobs etc. Slandering someone for their political stance isnt bringing an argument to the table. The questions here are about tax incentives and why do studios continue to send work out of the US. I am the one who originally posted about being offered a job at Sony. Thank you to Steve for discussing it in a nice and intelligent way. The others here need to stay on topic and not start attacking the left or the right. One can be a democrat and not support all that the democrats do as well as a republican.
^ Great point. Silly immature comments don't do any party or the other guys any good. Spending is ridiculously out of control in the State as Steve mentioned up top (and we know the country as well). So how does California make money it doesn't have? Only the ATM known as the Fed does that.
Studios will continue to send out and build locations elsewhere simply for the production budgets to be less. Thats it.
If the studio, based in California, had to pay something like a tax for services done elsewhere, it would better level the playing field. It's probably not called a use tax or an import tax, ; I'm sure they could think up a fancy creative name for it. The purpose is that for the lowered cost of having the work done elsewhere, they would be encouraged to do it here instead if they had to pay for it back here. How about it? I know it wouldnt fly with the use of lobbyists, but what is right is right, and this state needs money. Its not going to stop overspending.
If the studio, based in California, had to pay something like a tax for services done elsewhere, it would better level the playing field.
Sounds good, but what if the studio was not based in California? Would a tax like this give studios an incentive to move out of California to escape this tax?
I just love an organization where the President takes any sort of criticism, and instead of rationally discussing it.....He calls them a "Troll", and cites some 839 strike from like 1940....
Really puts us at ease.
Way to go Kaplan.
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