Maryland Learns Tax Incentives For Hollywood A Loser For Taxpayers

[fhl]

The issue is not that the EU declares it illegal to move to a low tax domicile. It is that Ireland and the Dutch have been breaking both EU and International tax laws and treaties. In other words, the countries were running a scam. This is fully described in articles I posted earlier.

The EU making all kinds of allegations that it is unfair to have lower taxes and that corporations are breaking laws and treaties is slightly different than stating that they are criminals breaking laws and running scams.
If they were really running illegal scams, the scams would have to stop like right now, wouldn't they? But instead, the deals that are currently being used are grandfathered until 2020. That should tell you something about the alleged illegality of them. The EU and the US simply do not like citizens and corporations moving to save taxes. Even after the double sandwich method is gone, people will still move to lower domocile locations, because taxes matter.

 

[gwb-trading]

The EU making all kinds of allegations that it is unfair to have lower taxes and that corporations are breaking laws and treaties is slightly different than stating that they are criminals breaking laws and running scams.
If they were really running illegal scams, the scams would have to stop like right now, wouldn't they? But instead, the deals that are currently being used are grandfathered until 2020. That should tell you something about the alleged illegality of them. The EU and the US simply do not like citizens and corporations moving to save taxes. Even after the double sandwich method is gone, people will still move to lower domocile locations, because taxes matter.

So you are an advocate that your country's entire tax system should be based around allowing global multi-national corporations (that don't even have a presence in your country) evade taxes, while taxing citizens and small corporations in your own country very high tax rates. Sounds like a real winner. It's also a race for the bottom.

You should rush to join the the Irish and Dutch -- go there, become a tax-paying citizen, and dream about the good old days when you paid low U.S. taxes.

 

[jem]

is there any surprise the founders set the country up as decentralized country with tariffs and property taxes and not income taxes? The idea that we tax companies on income earned overseas is just asking our companies to tax their jobs overseas.

You have to understand the beauty of a properly set up tariff system and the all the good it does before you fall back on your the college brainwashing which states tarriffs are bad.
Remember we are now a big importer and we lost a lot of jobs because of our stupidly set up tax system and lack of tariffs.

 

[fhl]

So you are an advocate that your country's entire tax system should be based around allowing global multi-national corporations (that don't even have a presence in your country) evade taxes, while taxing citizens and small corporations in your own country very high tax rates. Sounds like a real winner. It's also a race for the bottom.

You should rush to join the the Irish and Dutch -- go there, become a tax-paying citizen, and dream about the good old days when you paid low U.S. taxes.

You don't seem to know the difference between avoiding and evading taxes.

One is legal and no citizen or corporation is obligated to pay more than they owe. The other is illegal and one winds up being fined or imprisoned for doing so.

I am an advocate for lower taxes. I plead guilty to that. And I certainly don't consider US taxes to be low. I consider taxes to be an inhibitor to growth. The notion that gov't knows how to spend and invest money better than private citizens is laughable to me.

 

[AAAintheBeltway]

I'm torn on this tax issue. Some of these tax avoidance scans are outrageous, eg moving IP licenses around to low tax jurisdictions, etc. At the same time, the EU and other high tax countries want to turn avoidance into evasion, ie criminalize tax minimization. The reason is obvious. Once they eliminate escape routes, they can ratchet up taxes as high as they want.

 

[AAAintheBeltway]

is there any surprise the founders set the country up as decentralized country with tariffs and property taxes and not income taxes? The idea that we tax companies on income earned overseas is just asking our companies to tax their jobs overseas.

You have to understand the beauty of a properly set up tariff system and the all the good it does before you fall back on your the college brainwashing which states tarriffs are bad.
Remember we are now a big importer and we lost a lot of jobs because of our stupidly set up tax system and lack of tariffs.

I agree. We have a giant market that every foreign company wants to export to, so what do we do? Eliminate tariffs. Then we sign on to the WTO, so our policies can be dictated to us by euro bureaucrats interested in maxmizing their own countries' exports.

So-called free trade has been a giant loser for us. We are turning into a big third world country. The only things we can export are ag products, natural resources and the odd airplane here and there.

 

[gwb-trading]

As expected every single bit of film production activity leaves North Carolina when the Film Tax Credit is eliminated. Representing a loss of over $1 Billion yearly to North Carolina (over $316 Million direct & over $700 Million indirect overall representing a minimum of $105 million in state tax revenue) while costing the state a mere $62 million in tax credits What idiots in the state legislature drove this tax policy change.

Film productions dry up with loss of NC tax credit
http://www.wral.com/film-productions-dry-up-with-loss-of-nc-tax-credit/14372675/

Five movies shot in North Carolina will hit theaters this year, but the head of the state film office said Tuesday that no new movies are in production or currently planned anywhere in the state.

Guy Gaster, executive director of the North Carolina Film Office, said productions are taking a "wait-and-see approach" after the General Assembly decided not to renew a state tax credit for film, television and commercial productions.

Since 2010, productions have been able to claim a 25 percent refund on qualified spending on a production, up to $20 million. Producers applied for $62.2 million in credits in 2013, the most recent information available.

Film projects brought more than $316 million to North Carolina last year, filming in more than three dozen counties statewide, including Wake, Durham, Orange, Chatham, Franklin and Cumberland counties. The tax credit filing period is still pending, so it’s not clear yet how much production companies will claim in credits for the year.

Gaster said a single movie can bring hundreds of jobs to the state and pump millions of dollars into local economies, from restaurants and hotels to lumberyards and shops, such as an antique store in Concord where the "Hunger Games" producers shopped a few years ago.

"The shop owner said that they did over half of their year's business in that one day because (the producers) needed just different trinkets and things to set up a market kind of look on set," he said. “They’re building the set, so that’s where they’re getting their equipment and materials – locally.”

(More at above url)

 

[fhl]

Those numbers are coming from the state's film industry. I'm fairly sure that if the solar power industry were asked about gov't investment in their industry, they'd have glowing numbers, too. As long was we ignore all the Solyndras.

States auditors from states that give these film industry credits find that they don't even get their money back, let alone get a positive return on their investment.

http://www.cbpp.org/cms/?fa=view&id=3326

http://www.governing.com/topics/finance/gov-states-walking-back-cutting-film-tax-credits.html


"Another reason for cutting back on the largesse of the credits is, of course, a growing suspicion that states aren't getting their money's worth. The Motion Picture Association of America (MPAA), the main lobbying arm for the movie industry, consistently shows a return on investment for states. A recent study of the New York State Film Production Tax Credit found that for every $1.00 of credit distributed, the state and city received a combined $2.23 in taxes. Similarly, a Florida report found that $118.7 million in tax credits yielded $140.44 million in 2011-2012, for a return of $1.18 to the dollar.

By contrast, Louisiana's state auditor reported that the state's $196.8 million in tax credits yielded only $27 million in additional taxes (about $0.14 for every dollar spent). The Massachusetts Department of Revenue found its return to be only marginally higher at $0.16 per dollar spent."

 

[gwb-trading]

Those numbers are coming from the state's film industry. I'm fairly sure that if the solar power industry were asked about gov't investment in their industry, they'd have glowing numbers, too. As long was we ignore all the Solyndras.

States auditors from states that give these film industry credits find that they don't even get their money back, let alone get a positive return on their investment.

http://www.cbpp.org/cms/?fa=view&id=3326

http://www.governing.com/topics/finance/gov-states-walking-back-cutting-film-tax-credits.html


"Another reason for cutting back on the largesse of the credits is, of course, a growing suspicion that states aren't getting their money's worth. The Motion Picture Association of America (MPAA), the main lobbying arm for the movie industry, consistently shows a return on investment for states. A recent study of the New York State Film Production Tax Credit found that for every $1.00 of credit distributed, the state and city received a combined $2.23 in taxes. Similarly, a Florida report found that $118.7 million in tax credits yielded $140.44 million in 2011-2012, for a return of $1.18 to the dollar.

By contrast, Louisiana's state auditor reported that the state's $196.8 million in tax credits yielded only $27 million in additional taxes (about $0.14 for every dollar spent). The Massachusetts Department of Revenue found its return to be only marginally higher at $0.16 per dollar spent."

The numbers I provided come from the State of North Carolina - not from the film industry. They are outlined in the state auditors report.

I find it interesting that North Carolina has targeted tax cuts and tax credits for many industries - over two dozen of them. Everything from agricultural equipment providers to lawyers to optometrists. Most of these industries do not attract people from out-of-state, nor do they provide additional tax revenue due to having the tax credit in place.

Let's take a look at the tax breaks for Optometrists in North Carolina. Optometrists are licensed by the state, it is not like they are going to leave for another state. Nor do they provide increased revenue to the state due to a tax break for their businesses. However Jim Black, the former state legislative leader, was an Optometrist. He made sure that Optometrists across the state got all sorts of tax breaks because they "help school children see".

But of course, Jim Black is locked up in jail right now after being convicted of corruption at both the federal and state court level. - "Black pleaded guilty to a federal charge of public corruption on February 15, 2007, a felony carrying a maximum sentence of 10 years in prison and a $250,000 fine.[7] He admitted to accepting funds from chiropractors while their professional group had legislation pending in the North Carolina General Assembly. As a result, he resigned from the General Assembly on February 14, 2007."

Most of the targeted tax cuts and tax credits in North Carolina for business provide no additional revenue to the state due to the tax benefit. The Film tax credit is one of the few that provides additional revenue to the state due to the tax benefit and attracts outside firms to the state that spend money.

I find it absurd that Republicans keep all the other industry specific tax cuts which provide no additional revenue in place, but eliminate the film tax credit because they don't like that liberal Hollywood industry.

Don't get me started on the corporate economic incentives in cash, subsidies, and tax cuts that are provided to large corporations that relocate to North Carolina. In over 50% of the instances the corporations close up shop in under 3 years and still keep the cash from the state.

 

[Ricter]

"We have a giant market that every foreign company wants to export to, so what do we do? Eliminate tariffs."

Lmao. Tail, meet dog.