Saturday, March 26, 2016

What the Hell are the Koch Brothers Up To Now?: Taking Aim at Tax Credits for Films

WSJ reports:
More than a year before Friday’s “Batman v Superman: Dawn of Justice” was scheduled to hit theaters, a Michigan lobbyist backed by the billionaire Koch brothers was already giving the superhero epic a bad review.

The main objection of Annie Patnaude, deputy state director for the Michigan office of Americans for Prosperity, was the $35 million in tax credits given to the movie for filming in the state. “It’s Batman versus Superman, versus road repairs, income-tax relief or any number of other priorities for Michigan families and businesses,” said Ms. Patnaude. About four months later, state legislators killed the tax-credit program.

It was another victory for Americans for Prosperity, the free-market political-advocacy group backed by conservative billionaire brothers Charles and David Koch. The industrialists’ network of Americans for Prosperity staff and supporters across the country are keeping busy, taking aim at the film tax credits that have revamped how Hollywood does business.

This is an odd policy position for the so-called libertarian brothers to be focusing on.

For sure, governments shouldn't be picking favorite industries via tax credits or anything else. On the other hand,  a tax credit is a tax cut and there is nothing wrong with tax cuts. Thus, film tax credits are a mixed bag, not all good, but not all bad.

You would think the brothers would focus resources on tax cuts for all of us rather than bitching about the film industry cuts.



  1. The Michigan Film and Digital Media Incentive was signed into law on April 7, 2008, by Governor Jennifer M. Granholm(D). The legislation included Public Acts 74 through 87 of 2008. Introduced for the purpose of workforce and infrastructure development, a refundable or transferable tax incentive focuses on film, television and digital media production in the state of Michigan. The pre-2012 enactment of the film incentive, included a 40-percent subsidy for covered personnel expenditures, with an additional two-percent available for projects produced in Michigan's 103 core communities. Above the line personnel, directors, writers, producers etc., were eligible for a 40% credit on salaries regardless of Michigan residency. Below the line personnel, film industry craftsmen, technicians and engineers received a 40% credit if they were Michigan residents, or 30% for nonresidents. Capped at $20 million annually, the construction industry also benefited with a 25-percent subsidy for capital improvements, on the creation of new film-industry related facilities. The workforce development incentive also provided a Film and Digital Media Job Training Tax Credit, of 50-percent, for on the job training expenses of Michigan residents.[28]
    Of the 35 states that provide film industry incentives, 13 were considered competitive in 2008, Michigan became one of the top 3 competitors with New Mexico and Louisiana in this group. In 2008, Michigan film industry expenditures grossed $125 million, up from $2 million in 2007, creating an estimated 2800 jobs with incentive outlays of $47,992,000.00.

  2. Bob, the passage you cited uses "subsidy" and "credit" interchangeably, but from a libertarian standpoint they are ethical opposites. No wonder libertarians are split on this issue!

    1. I have no technical expertise on the issue, but the debates about the program on the radio spoke of credits and actual payouts/subsidies.

  3. Libertarian theory question - I'm trying to register a domain, but the name I want is already taken. Some pimple faced geek bought the name and parked the domain. I imagine he is trying to sell it for profit. Does this guy have legitimate claim ownership of the domain I covet in a libertarian society? He has done nothing with this domain. It is as if the domain never existed. He didn't technically purchase the domain, rather created it and paid for the registration. Could I "homestead" this web domain in a libertarian society? How does this situation differ from real land (if it does)?

  4. Like our beloved Instapundit, I too am against the film tax credits. Primarily for the reason that the Leftist hypocrites in Hollywood think eberyone should be paying more taxes (except them, of course).