Oscar Winners: “We’d Like to Thank the Taxpayers”

Making movies costs a lot of money, but the average taxpayer, while tuning into the Oscars, isn’t likely to expect a thank you. Imagine how that would sound:

I’d like to thank my family, the cast, phenomenal directing, and American taxpayers, who made making this film a bargain.

Collectively, the nine films competing for Best Picture at this weekend’s 86th annual Academy Awards represent approximately $367 million in production costs, according to the website Box Office Mojo.

Tax credits, tax rebates, and tax exemptions in 45 states subsidize film making, while costing taxpayers millions of dollars in revenue.

The Wolf of Wall Street had a production budget of $100 million, but New York State provided a $30 million tax credit to the filmmakers. The film has grossed more than $338 million around the globe.

In some states, like California, organizations like the Directors Guild of America have argued these tax credits help create and protect jobs. However, studies in Louisiana, Massachusetts, North Carolina, and Pennsylvania have suggested per dollar the subsidies could have been used more efficiently.

In the case of Louisiana, tax incentives in 2010 to the film industry totaled approximately $196.8 million, but the economic activity generated by the credit returned only $27 million in tax revenue. Said differently, the state forfeited $169.8 million in 2010 in tax revenue that could have alternatively been invested in education, infrastructure, or job-training programs.

In Pennsylvania, the film industry has been estimated to give 14 cents back for every dollar of taxpayer funding. While subsidizing the film industry, Pennsylvania has recently cut state supplemental security income (SSI) supplements, reduced state education grants, lowered higher education spending, and exposed state employees to hiring freezes.

As research by the Center for Effective Government has shown, “investments in education, health care, and infrastructure have been shown to have a rate of return of as high as 30 percent over a 20-year period.”

If investments in education, infrastructure, and social welfare programs are sacrificed to promote the film industry, perhaps it’s time for citizens to assert their proper seat in the director’s chair of government, and shout out a collective “cut” to stop this ineffective tax scene.

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NY DID NOT PROVIDE $30mm CREDIT. NOT POSSIBLE BY LAW.