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STATE FILM SUBSIDIES: NOT MUCH BANG FOR TOO MANY BUCKS


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I think the studios just ought to go where it's cheap to do business, and I think government ought to stay out of it other than giving some tax incentives.

 

 

I've suggested before that if So Cal film professionals really want to give "the majors" an incentive, why not just slash wages by half and give up meals on set and give up box rentals. Sound silly?

 

Let's say Western Region IA tells the industry that starting tomorrow, all rates would be slashed by 75% and they wouldn't have to provide catering or craftie anymore and crews would give the production their gear and not charge the box rental. How's that for an "incentive"?

 

So, let's assume that the majors jump on that because suddenly, it's way less expensive to shoot in LA now than a state that offers a meager 42% tax "incentive." The crews in Atlanta and New Orleans start bitching up a storm, complaining that suddenly they can't make a living anymore. So the majors say, "hey, tell you what, drop YOUR rates by 80% to compete with the LA crews and we'll bring our movies back to you." So they do. Then LA crews drop theirs to 90% AND toss in some subsidy cash up front. Then Canada is getting hammered and they give all of that AND kick in some cash (provided by their taxpayers). So all the projects move back to Vancouver. Then NYC decides to offer 95% cut in crew rates, no box rentals, no meals, no OT, cash back, AND free locations. Then LA gives all of that AND offers up free off-duty police to provide security.

 

You see where this is going? There's no such thing as a tax "incentive." They are bribes. Plain and simple. Bribes that "the majors" can wield as blackmail to extort more from some other state, city, or union. "Give us this or we'll take our ball and go play somewhere else."

 

Official policy by governments is to not give in to ransom demands by terrorists. Corporations are economic terrorists, taking more and more and more from "labor," while taking more and more and more from nations, states, cities, and towns that need the tax revenue. All of those "give-aways" are tantamount to the tax-payers being Producers in the projects they are helping to finance. So where is the profit-sharing? Crews aren't getting it as wages are dropping or stagnant. Local governments aren't getting it as they give away more than they get back.

 

Instead of giving in to this bribery scam, California should lead the way in ending it for everyone. Corporate tax-breaks haven't spurred the economy. The people at the top and stock-holders just pocket the money, send it offshore, and use it to get the newest Italian supercar or to attract another supermodel or finance their coke habit. They'll still make movies if there were no tax bribes. They did it before for a long long long time and they'll do it again, but only if We the People get involved to stop this insane zero-sum game race to the bottom.

Edited by Brian Dzyak
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  • 2 weeks later...
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I've suggested before that if So Cal film professionals really want to give "the majors" an incentive, why not just slash wages by half and give up meals on set and give up box rentals. Sound silly?

 

Let's say Western Region IA tells the industry that starting tomorrow, all rates would be slashed by 75% and they wouldn't have to provide catering or craftie anymore and crews would give the production their gear and not charge the box rental. How's that for an "incentive"?

 

So, let's assume that the majors jump on that because suddenly, it's way less expensive to shoot in LA now than a state that offers a meager 42% tax "incentive." The crews in Atlanta and New Orleans start bitching up a storm, complaining that suddenly they can't make a living anymore. So the majors say, "hey, tell you what, drop YOUR rates by 80% to compete with the LA crews and we'll bring our movies back to you." So they do. Then LA crews drop theirs to 90% AND toss in some subsidy cash up front. Then Canada is getting hammered and they give all of that AND kick in some cash (provided by their taxpayers). So all the projects move back to Vancouver. Then NYC decides to offer 95% cut in crew rates, no box rentals, no meals, no OT, cash back, AND free locations. Then LA gives all of that AND offers up free off-duty police to provide security.

 

You see where this is going? There's no such thing as a tax "incentive." They are bribes. Plain and simple. Bribes that "the majors" can wield as blackmail to extort more from some other state, city, or union. "Give us this or we'll take our ball and go play somewhere else."

 

Official policy by governments is to not give in to ransom demands by terrorists. Corporations are economic terrorists, taking more and more and more from "labor," while taking more and more and more from nations, states, cities, and towns that need the tax revenue. All of those "give-aways" are tantamount to the tax-payers being Producers in the projects they are helping to finance. So where is the profit-sharing? Crews aren't getting it as wages are dropping or stagnant. Local governments aren't getting it as they give away more than they get back.

 

Instead of giving in to this bribery scam, California should lead the way in ending it for everyone. Corporate tax-breaks haven't spurred the economy. The people at the top and stock-holders just pocket the money, send it offshore, and use it to get the newest Italian supercar or to attract another supermodel or finance their coke habit. They'll still make movies if there were no tax bribes. They did it before for a long long long time and they'll do it again, but only if We the People get involved to stop this insane zero-sum game race to the bottom.

Sorry I didn't respond earlier.

 

Back in the 90s I mailed out a special to drum up business. $50/day rate for gripping and PA work. I got TONS of phone calls, and was booked solid for several weeks. Some guys wanted me as a camera assistant, which I had to turn down because I couldn't (and still can't) load a film magazine. Some lady wanted me to work for food. I told politely to take a hike. Some guys wanted me to do a little AD work, which I gave into since I wasn't having to keep track of the crew but just stand around and pass on orders (someone else was doing the paper work). Call me what you will, but that's what I did.

 

As far as tax incentives go, no, I don't mean the state stepping in a slashing wages. I mean a real tax incentive. You get a break on your personal and company taxes if you shoot in a state. The state has no business in dictating wages and perks. It's none of their business. The best they can do is cut back their intake from an industry that they'd like to business in their territory.

 

So I don't buy your argument about the snowball from tax incentives. There are other factors, and no amount of tax incentives is going to change the cost of real estate, the cost of renting equipment, manufacturing film stock or hard drives, and all the rest. Tax incentives are just that; tax incentives.

 

Hollywood itself started as a bible thumping suburb. Land was cheap and sunny. Perfect filming conditions. I don't know what kind of state Taxes there were in the early 1900s, but I bet they were a lot simpler then than now.

 

Pre-80s (before the mid 70s) movies used to be a great investment because you could write off X number of dollars for every dollar you put into a film. That's not the case anymore, largely because the big film studios are corporate owned. But, imagine an old fashioned private production company with studio facilities getting some outrageous old fashioned tax break. I'll bet you they would move to whatever state was offering it, and setup shop there with a low rate loan. That's not going to happen, but I'll bet you it would help give that state's industry a shot in the arm.

 

Whether it was here in California, your state (whichever it is), Indiana, Maryland, Texas, North Dakota ... you name it. If the conditions were right, the prices for everything else was right, a support network was in place, then any studio would be crazy not to take the plunge.

 

Tax breaks only go so far. They're just the government's cut; the cost of doing business in the US and whatever state you're in. They're not the end all, but they can, if applied properly, mean the difference between an economy in recession and one in recovery.

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Audit finds gaps in Alaska’s film tax credit program

 

 

http://realfilmcareer.com/audit-finds-gaps-in-alaskas-film-tax-credit-program/

 

 

 

Ben Anderson

 

An audit conducted on Alaska’s still-young film tax credit program indicates that the controversial program seems to provide an economic benefit to the state, though it admits that there are some ways to improve the system.

 

The Alaska film tax credit was renewed during the 11th hour of this year’s legislative session, ensuring 10 years or $200 million in further tax credits for productions filming in the Last Frontier.

 

The program has proven controversial, with some questioning the effectiveness of such a tax credit, especially given that many productions bring up their own cast and crew, rather than rely on local talent. Supporters of the program hope that issue will work itself out over time, as film industry hopefuls gain experience working from one film set to the next.

 

Additionally, concerns have been raised about the lack of transparency surrounding the awarded tax credits. After a producer has received their tax credit — the largest yet has totaled more than $9.6 million — they can then turn around and sell that credit to a corporation operating in Alaska.

 

Other states have experimented with film tax production incentives, but in recent years, several have reconsidered, eliminating the credits after concluding that they didn’t stimulate economic production. Some states even concluded such tax credits harmed their bottom lines.

 

Auditors: Tax credit creates jobs, at a cost

The most recent audit, delivered to lawmakers in late August concluded that the Alaska film tax credit program has had a positive impact in the state, equating to about $2 of economic output for every dollar of production tax credit issued. That’s according to a report done by Northern Economics intended to evaluate the impact of the program on the state’s economy.

 

Additionally, auditors found that the equivalent of 432 full-time jobs for Alaska residents have been created by the program. From 2008-2011, the program was responsible for about $8.1 million in direct wages for Alaska residents. This pales in comparison, though, to the wages paid to out-of-state cast and crew, almost $48 million.

 

Of course, that number can also include larger wages paid to some of Hollywood’s biggest stars, like Drew Barrymore and Ted Danson in the Alaska-filmed “Big Miracle.”

 

The report does warn, however, that despite the rosy numbers from the injection of cash related to production in the state, the program doesn’t pay for itself in taxes.

 

“The consultant’s analysis estimated that the total $21.2 million in tax credits issued by the State generated economic activity resulting in an estimated $1.2 million in additional taxes and fees,” the audit said. “The program does not pay for itself and, through February 2012, has created a fiscal deficit totaling $20 million.”

 

Additionally, the audit notes several problems with the language that regulates the film tax program. Included among these were a need to explicitly outline what would constitute a production as being “in the state’s best interests,” a vague bit of language left up to the Alaska Film Office’s discretion. This recommendation was also made in another audit earlier this year, before the program was extended.

 

To their credit, the Alaska Film Office has denied at least tax credit based on the argument that it wouldn’t have been in the state’s best interest to provide an incentive for two proposed productions.

 

Most of the recommendations revolve around ensuring that productions are accurately reporting in-state expenditures and confirming that reported resident wages are, indeed, going to Alaska residents. Each film tax credit applied for is subject to review by an independent accountant, and the audit expressed concern about production companies not being completely transparent with those consultants when it came to wages paid to Alaskan or out-of-state residents.

 

The report concluded that although the raw numbers seem to indicate a positive economic impact in due to the program in Alaska, it warned that the program is complex and there may be more to learn from the way it’s operated. Other states have also seen economic benefits in production incentive audits, though the true impact can be difficult to judge.

 

“The significant variations in the design of film production incentive programs and differences in state tax structures make comparisons between states problematic,” the report said. “Other states’ impact analysis reports on film production incentive programs indicate that all film production programs create positive economic impacts while in operation.”

 

Overall, production in Alaska seems to have lulled in the months following the Legislature’s renewal of the program. Since the fiscal year began on July 1, only nine productions have been approved for tax credits, none of them feature films, and most commercials or reality TV programs.

 

The last feature film to be completed in Alaska under the program was the Nicolas Cage-John Cusack flick “The Frozen Ground.”

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The reason is that Toronto has huge sound stages, two big labs/post houses (Deluxe and Techi Colour), and hundreds of trained film professionals. Across the border in Michigan.....they can offer none of this. I don't think Michigan has any place that can process 35mm and deliver HD dailies. Does New Mexico?

 

...

 

This means a guy shooting his first indie for 100K, qualifies the same as a Hollywood production spending 100 million.

 

When you advocate an end to film tax credits, you also advocating an end to assistance to the very people you claim that you speak for and are trying to help.

 

In Massachusetts, an indy qualifies for the same tax credits, but they're capped, and you have to compete against the studios. The big players who can afford to hire lobbyists usually get them. Small guys never get those credits. Local people never get those credits. Shooting Guerilla becomes riskier, since there's money involved in shooting now, where there didn't used to be.

 

Keep in mind that Toronto only has those labs and studios because of Canadian government grants/funding to Canadian filmmakers for decades; the Canadian Media Fund, run through TeleFilm Canada. "The Great White North" (Bob and Doug MacKenzie) were created because SCTV would only get state funding if they included Canadian content. They are a lot more strict about auditing productions, and that has been the key to their success.

 

Croenenberg gets to make the films he wants to make, because he can get funding. Only in Canada. There is no American equivalent to Telefilm Canada. Not at the state level or federal level. The closest thing is the Corporation for Public Broadcasting, and that's essentially the political oversight for PBS and NPR. The closest you could ever get in the US was NEA grants, and those got cut hard back in the early 90s. They even made jokes about it on "Married...With Children."

 

To be honest, cut the crooked tax credits, and replace them with grants for local filmmakers. Or loans, that are strictly managed through a public corporation, on the Telefilm Canada model. I think small productions would do a lot better, and you'd get a lot more bang for your buck, as a taxpayer. The state of Massachusetts allocated something like $100 mil a year for years on end (the same as Telefilm Canada), and doesn't get much return on investment for it. 2 million allocated for grants would get way more results. And Mass does have a lab that does dailies (and is even a sponsor here, Cinelab) that does a kick ass job.

 

But we don't have a Telefilm Massachusetts. Anyways, that's my two cents.

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I'd be in favor of "tax incentives" if the national, state, and/or local governments handing them out became actual profit-partners in the productions. After all, those governments are essentially giving productions free cash, either as a tax savings or as an outright handout. And "government" is nothing more than the taxpayers who live there...the majority of whom will not have work on those productions. So those citizen tax payers are handing cash over to a for-profit Corporation and getting absolutely nothing out of it.

 

Anyone who invests a dime into a production should be a profit-sharing producing partner so taxpayers who give out these "incentives" and subsidies should be reaping a share of any profits. That simple step would turn the tax BRIBE scam into a legitimate program that actually benefits society in a tangible quantifiable way.

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http://realfilmcareer.com/hollywood-tax-incentives-come-under-fire/

 

Hollywood tax incentives come under fire

 

 

By Jonathan Berr, NBC News contributor

 

Hollywood has enjoyed soaring tax incentives over the past decade as states vie with one another to attract the glamorous moviemaking industry. But now some state officials are beginning to rethink the costs of becoming part of Hollywood’s dream machine.

 

States offered nearly $1.3 billion in incentives to lure film and television productions in 2011, up from just $3 million in 2000, according to the Tax Foundation, which expects the figure to continue to rise this year. And it’s not just California and New York underwriting the industry: About 40 states now offer some form of incentives, making them an integral part of the entertainment business.

 

“The beginners of this were Louisiana and Hawaii,” said Joseph Henchman of the Tax Foundation, in an interview. “They were successful at it.”

 

So successful, in fact, that states with healthy entertainment industries initiated credits to prevent productions from fleeing to lower-cost states. “That’s when the money exploded,” Henchman said.

 

Henchman and other tax experts argue that Hollywood tax credits are not worth the money because the economic benefits created by these productions are fleeting.

 

“I think states are realizing that they are not worth the cost,” Cara Griffith of State Tax Notes said in an email. “The reality is that most states have not seen a corresponding increase in jobs created or dollars of revenue brought into the state.”’

 

Still, only a few states have been willing to give Hollywood a cold shoulder. The reasons are many. For one thing, there is civic pride. Henchman notes it’s “irritating” for people to see a film that is supposedly set in their town that was shot elsewhere. Not to mention the desire of politicians to bring some Hollywood glamour to their communities.

 

“Creating a great business climate is a great way to create jobs, but you don’t get to take photos with celebrities.” Henchman said.

 

Some states are less eager to roll out the red carpet for Hollywood.

 

Efforts in Hawaii to expand the credit last year failed to get approval from the legislature, according to Georja Skinner, a state official. New Jersey Gov. Chris Christie suspended the Garden State’s tax credit in 2010, saying the cash-strapped state could no longer afford it. Arizona’s lapsed in 2010, and Iowa ended its program in 2009 after $26 million in state money was misused, resulting in criminal charges.

 

But the majority of states still offer incentives. California Gov. Jerry Brown recently signed a two-year extension to the state’s film tax credit, and New York recently sweetened its incentives. Pennsylvania Gov. Tom Corbett saved his state’s incentive from the budget ax last year, and Georgia’s program also was spared.

 

Industry officials say tax incentives can be a critical factor in deciding where to locate a production.

 

“It’s extremely important,” said Joseph Chianese, executive vice president at EP Financial Solutions at Entertainment Partners, “I can’t believe that 40 states and 30 countries are doing it just to do it.”

 

Many states also reap other benefits from TV and movie shoots such as increased tourism, according to the Motion Picture Association of America, an industry trade group. Studios in New York, Connecticut, .New Mexico and Michigan have made significant investments their infrastructure and equipment because of the incentives, according to the MPAA.

 

California’s program is relatively modest in scope at $100 million, compared with the $400 million New York spends. And California’s is targeted at smaller productions, with big-budget movies, network television and premium cable programs ineligible.

 

Nonetheless, the program is hugely popular. The state got 176 applications for the credit on the first day to apply for the program last year, more than double what was received in 2010, according to a study by the Milken Institute. Other states have reaped benefits as well.

 

Pennsylvania officials estimate that $334 million was spent in film production across the state, creating 2,159 full-time jobs in its latest fiscal year. The state has $60 million in film tax credits budgeted for fiscal 2012-13, unchanged from the previous year.

 

Georgia estimated the economic impact of the entertainment industry at $3.1 billion in the state in the last fiscal year from 333 productions. The Peach State, where filmmaker Tyler Perry shoots most of his movies, had a record year in 2011.

 

There is no direct cost to taxpayers since the state’s incentive is a refundable tax credit, according to Lee Thomas, director of the Georgia Film, Music & Digital Entertainment Office. Henchman disputes this view arguing that the 30 percent credit is transferable and is being sold to entities that owe the state money. He estimates that the state’s annual film tax incentives cost $200 million.

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"Henchman disputes this view arguing that the 30 percent credit is transferable and is being sold to entities that owe the state money. He estimates that the state’s annual film tax incentives cost $200 million."

 

For once I'll agree with a portion of one of your anti-tax credit articles. States that use the above system are just plain......nuts! Selling your tax credit to a corp that owes taxes is a stupid, stupid, idea.

 

I found this part very amusing:

 

“The beginners of this were Louisiana and Hawaii,”

 

Really? That's incredible, we had it here in Canada long before US states jumped on the band wagon!

 

Plus all of the numbers from US states are quite paltry compared to Ontario's tax credit system. For a CDN film shooting outside of Toronto the labour refund is 45%! Then there is also the 25% federal portion on top of that. The US doesn't have a federal film tax credit that applies to all 50 states.

 

Not sure I see what all the fuss is about South of the border?

 

R,

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  • 1 month later...

Kill the Hobbit Subsidies to Save Regular Earth

 

 

 

http://realfilmcareer.com/kill-the-hobbit-subsidies-to-save-regular-earth/

 

http://www.bloomberg.com/news/2012-12-04/kill-the-hobbit-subsidies-to-save-regular-earth.html

By Joe Karaganis

The much-anticipated first film of “The Hobbit” trilogy has its U.S. premiere on Dec. 14. If the series matches the performance of “The Lord of the Rings” trilogy, it will gross about $3 billion.

So how much taxpayer money, would you guess, did Warner Bros. Entertainment Inc. need to produce the films based on the J.R.R. Tolkien book? The answer is zero. The studios are investment companies, and the films are almost certain to be immensely profitable.

But now you aren’t thinking like a studio. The real question is: How much taxpayer money can Warner Bros. demand from the government of New Zealand to keep production there (rather than, say, in Australia or the Czech Republic)? That answer turns out to be about $120 million, plus the revision of New Zealand’s labor laws to forbid collective bargaining among film-production contractors, plus the passage of three-strikes Internet-disconnection laws for online copyright infringement, plus enthusiastic and, it turns out, illegal cooperation in the shutdown of the pirate-friendly digital storage site Megaupload and the arrest of its owner, Kim Dotcom.

For keeping Warner Bros. happy, Prime Minister John Key, a former Merrill Lynch currency trader, got a replica magic Hobbit sword from U.S. President Barack Obama and a chance to hang New Zealand’s fortunes on becoming the tourist destination for Middle Earth enthusiasts. What could go wrong?

Hot Money

Let’s start with the obvious. Film money is the hottest of hot investment money, fast in and fast out. Production is very mobile, and studios have become adept at extracting subsidies from governments for a few trinkets and promises of jobs.

This is true in the U.S., where state and local subsidies rocketed from $2 million in 2003 to about $1.5 billion in 2012. Film subsidies are epidemic in Europe, where countries compete to attract and retain productions. And it has been a major part of New Zealand’s cultural and industrial policy, where more than $400 million has been invested in “The Lord of the Rings,” “Avatar” and a handful of other productions over the past decade.

But competitive subsidies are the quintessential suckers game, in which winning is losing.New York City found this out in 2009, when it decided it had to subsidize productions to keep them from leaving the city. When the three-year subsidy budget was exhausted in one year, the city called it quits.

The U.K. government found this out in 2005, when Warner Bros. threatened to move “Harry Potter” productions to the Czech Republic. The government of Gordon Brown caved in to studio demands and passed new subsidies. In 2009, New Zealand also gave in and now facesdemands for more.

The worst part is that, for most of the wannabe Hollywoods, it’s bad economic policy on every level. The productions bring in mostly low-end, temporary jobs, while the high-end jobs remain in Hollywood or New York. Call it the Curse of Harry Potter.

So what to do? One way to break the curse is to route public money through what we might call an Expecto Patronum license — named after the powerful defensive charm in the Potter series. Under the license, public money takes the form of a conditional loan rather than a grant or tax break. After five years, producers have a choice: Pay back the loan or re-release the film under a Creative Commons attribution license, which would allow it to be shown freely.

If a film is among the few that have longer-term commercial value, its producers can choose the first path. If it isn’t, they lose nothing by taking the second route. The license thus underwrites creative risk-taking without squandering public money on blockbusters. It also ensures that public investment generates public culture — not works controlled by the studios for the next 95 years.

Trade Agreements

The license, however, doesn’t answer the question of how we end the competitive race to the bottom. Fortunately, there are trade agreements for this sort of collective-action problem, such as the Trans-Pacific Partnership. The pending trade deal is being negotiated this week in New Zealand by its government, the U.S. and nine other Pacific Rim countries.

Unfortunately, the trade pact is widely regarded as yet another sellout to Hollywood. A draftchapter on intellectual property reads like a greatest hits of bad enforcement ideas, including three-strikes Internet disconnection for repeat infringers and content blocking by Internet providers.

Still, the trade framework could be used for good. It could support our increasingly rich, participatory, global audiovisual culture, rather than curtail it. It could also look to the Washington Declaration on Intellectual Property and the Public Interest, released by the American University Washington College of Law, for ways to balance public and private interests, rather than to Warner Bros.

Many New Zealanders aren’t amused by Key’s sellout to Hollywood, even if their country gets a short-term payoff. Warner Bros. and Key shared a local award last year for the Worst Transnational Corporation Operating in New Zealand. The ceremony included a special Quisling Award for Hobbit director Peter Jackson, who was named “the individual who did the most to facilitate foreign control of New Zealand.” And yet this fealty will do them little good if Warner Bros. decides to take the next Middle Earth epic to Bratislava, Slovakia, for an extra 10 percent tax break.

So come on, New Zealand. Roll the TPP agreement into a wand, stick a kiwi feather in it, and cast your Expecto Patronum spell! Help free Regular Earth from the tyranny of Middle Earth.

(Joe Karaganis is vice president of the American Assembly, a public-policy institute based atColumbia University. The opinions are expressed are his own.)

 

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You don't live and pay taxes in NZ Brian so the reason you care is??????????????

 

Also there are parts of this story which are patently false:

 

"The productions bring in mostly low-end, temporary jobs, while the high-end jobs remain in Hollywood or New York."

 

Not true, a large number of the CG guys at WETA are making 75K+ a year to work on the LOTR movies and AVATAR. The idea that the jobs being generated in NZ by the LOTR movies are low paying is false.

 

R,

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You don't live and pay taxes in NZ Brian so the reason you care is??????????????

 

It's not about where this scam happens. That it happens anywhere on the planet is reason enough to draw attention to it in an effort to stop it from happening.

 

Also there are parts of this story which are patently false:

 

"The productions bring in mostly low-end, temporary jobs, while the high-end jobs remain in Hollywood or New York."

 

Not true, a large number of the CG guys at WETA are making 75K+ a year to work on the LOTR movies and AVATAR. The idea that the jobs being generated in NZ by the LOTR movies are low paying is false.

 

R,

 

A) You claimed that there are "parts" that are wrong, yet you named only one. Are there more or just that one?

B ) The single part you claim to be wrong has zero references connected to it. How many people precisely? How much do they actually take home? How long have they and will they have these high paying jobs? Where are your sources to prove this assertion that counters the article's own assertion?

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It's not about where this scam happens. That it happens anywhere on the planet is reason enough to draw attention to it in an effort to stop it from happening.

 

I still say you have no business telling people in other countries how to spend their tax dollars or what their public policies should be. I know you won't have much luck coming to Ontario and getting anyone to listen to you.

 

A) You claimed that there are "parts" that are wrong, yet you named only one. Are there more or just that one?

B ) The single part you claim to be wrong has zero references connected to it. How many people precisely? How much do they actually take home? How long have they and will they have these high paying jobs? Where are your sources to prove this assertion that counters the article's own assertion?

 

P-lease Brian give me a break, you honestly believe animators at WETA are making $5.50/hr?

 

Ok fine, this site here says WETA averages a staff of 570, with 60 per cent coming from off shore. Many of those are Americans FYI:

 

http://cio.co.nz/cio.nsf/str/weta-digital

 

As with any film production company the staff levels would rise and fall as features ramp up and ramp down.

 

Here is some info on the salaries at WETA, looks like they are well above the minimum wage slave salaries I'm sure you envision. You know they actually have cars and electricity in New Zealand as well. It's not the Third World haven of sweat shop labour you think it might be:

 

http://www.glassdoor.com/Salary/Weta-Digital-Salaries-E235005.htm

 

This article here says WETA staff is expected to be 2200 while the Hobbit is in production:

 

http://www.stuff.co.nz/dominion-post/comment/blogs/wellywood-confidential/4751864/Why-Weta-Digital-blows-my-mind

 

R,

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  • 3 weeks later...

Bailouts for BC Film Industry? Cut!

 

 

http://realfilmcareer.com/bailouts-for-bc-film-industry-cut/

http://thetyee.ca/Opinion/2013/01/22/BC-Film-Industry-Bailout/

Politicians, resist being seduced by Hollywood’s subsidy hungry hype.

By Bill Tieleman

“Free is too much!” – Desk sign at Hollywood film producer’s office, 1998

If there’s one thing that both BC Liberals and New Democrats can agree on it’s this: giving money to Hollywood is almost irresistible!

So if you want to get literally hundreds of millions of tax dollars to subsidize your already highly profitable $1.2 billion industry, just send a few movie stars and producers up to British Columbia, smile sweetly about how you love the place and then threaten to leave.

Works every time.

And when over 1,000 rightly worried film and television workers meet tonight at North Shore Studios for a Save BC Filminformation session that will get blanket media coverage, and an online petition hits 25,000 signatures, watch the pressure build on both parties to outbid each other with your money.

But things don’t change when it come to film moguls milking the government like a prize dairy cow while promising to make politicians look like stars.

Adventures in Hollywood

In 1998 I went on a “fact finding” mission to Hollywood representing labour, along with a B.C. government deputy minister and film industry representative.

The trip was needed because Ontario had just introduced an11 per cent tax credit on labour used in film and television production — excluding foreign actors and crew — and B.C. was under pressure to match it or the industry would die hard with a vengeance.

We spent two days meeting movie executives and in one producer’s office was a big sign at his desk that epitomizes the whole situation: “Free is too much!”

The penny — and a several million dollars — dropped for me then.

The same producer said his firm would shift a $2 million

television movie of the week from Vancouver studios to Toronto if it could save just $10,000 in total from Ontario tax credits.

“Seriously?” we asked incredulously. “Even with more experienced crews, the time zone difference, better weather, the extra distance from Hollywood, the variety of locations and sets?”

“Yes,” was the straight answer back.

And it may be true.

Scripting a bidding war

B.C. paid up then even when the dollar hit as low as 63 cents U.S. and kept jacking the tax credit from 11 per cent to an astonishing 33 per cent today on all local labour costs, plus additional credits for shooting outside Vancouver, spending around $285 million a year to keep up to 25,000 jobs here. Currently the industry says the unemployment rate is about 90 per cent.

But Hollywood has a good script and we now see the results of Ontario and Quebec starting a shameless bidding war for film industry jobs and investments with an incredibly generous tax credit hike to 25 per cent of total costs that puts B.C. 10 per cent to 13 per cent behind them.

Better investments

Just think for a minute about that — would the restaurant or forest products or construction industry like to get a one-third tax credit on all its labour costs?

A tax credit that really means you get all tax paid back and then a cheque from the government for the remaining value of that cost?

You bet! Would they invest that money in B.C. to create more jobs? Sure!

Would spending $300 million a year building 1,000 or more units of housing for the homeless create lots of great jobs and put a needed roof over people’s heads too? You bet!

But unlike the film business, other sectors can’t easily get up and leave town.

Movie and TV shoots, unfortunately can and do.

And they’re not shy about making that clear.

Movie production manager Warren Carr made it clear in an interview with CKNW radio’s Sean Leslie on Sunday.

“Yes, we need a little help on the tax credit,” said Carr, who helped produce The Bourne Legacyand Diary Of A Wimpy Kid.

The movie moguls were also big fans of B.C.’s outgoing Harmonized Sales Tax, which also put more money in their pockets at consumers’ expense, advocating strongly for it in 2011′s binding referendum when I was strategist for Fight HST, the group that successfully opposed the tax.

Today the industry’s Save BC Film online petition also puts it plainly — give us tax money:

“Vancouver’s ability to remain a competitive film market relies heavily on the support of the provincial government and their enthusiasm for maintaining an attractive taxation scheme.

“With a strong Canadian dollar, this is the only way to ensure and build upon the long-term success that has been established.”

Fair enough from the film industry perspective — and no one wants to see workers unemployed — but the rest of us may not agree that ever-rising levels of tax rebates from the public coffers are a good way to save jobs.

Let’s direct our own fate

No matter what B.C. does, other jurisdictions in Canada, the U.S. and elsewhere have engaged in an unlimited bidding war for Hollywood’s favour, with tax credits as high as 35 per cent in Louisiana.

So what’s the solution if throwing more money at Hollywood isn’t?

There has to be a sustainable plan for B.C.’s film and television industry; one that isn’t completely dependent on massive tax credits or a depressed Canadian dollar to survive and grow.

But it won’t be developed in the heat of a panic campaign or with advice from self-serving movie moguls.

And Hollywood’s love of whip-sawing province against province, as well as American states and foreign countries, for the biggest, fattest tax credits imaginable has to hit the cutting room floor at last.

Premier Christy Clark and her government have done a pretty miserable job with the industry, considering how much money they spend on it, alienating both workers and bosses with their indifference to what really is a very difficult situation of high unemployment and fewer productions in B.C.

But both parties would be smart not to jump when Hollywood yells: “Action! Throw us big bucks and make it look sincere!”

With a sensible strategy, B.C.’s film and television business won’t fade to black and the hit movie “Tax Credit Bandits” won’t keep producing expensive sequels.

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"There has to be a sustainable plan for B.C.’s film and television industry; one that isn’t completely dependent on massive tax credits or a depressed Canadian dollar to survive and grow."

 

I certainly agree with what he says above. That is 100% true. BC has several other factors playing against them like militant unions, their own actors union, too many rain days, massive traffic congestion in and around Vancouver. Their claim to the most experienced crews is highly dubious, obviously that title goes to Toronto.

 

Ontario will always have a tax credit because Quebec will always have theirs, no question.

 

And again, dozens of other industries in the USA and Canada receive subsidies. Certainly not just the film industry. Look at the subsidies farmers get in the USA, they are huge!

 

R,

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  • 2 weeks later...

"There has to be a sustainable plan for B.C.’s film and television industry; one that isn’t completely dependent on massive tax credits or a depressed Canadian dollar to survive and grow."

 

I certainly agree with what he says above. That is 100% true. BC has several other factors playing against them like militant unions, their own actors union, too many rain days, massive traffic congestion in and around Vancouver. Their claim to the most experienced crews is highly dubious, obviously that title goes to Toronto.

 

Ontario will always have a tax credit because Quebec will always have theirs, no question.

 

And again, dozens of other industries in the USA and Canada receive subsidies. Certainly not just the film industry. Look at the subsidies farmers get in the USA, they are huge!

 

R,

 

The difference between the film industry and almost every other industry (i.e., farming, any factory) is that while a tax break for a factory means that X industry will REMAIN in a specific location for years guaranteeing steady employment for the local population, the film industry is inherently temporary and nomadic.

 

Film producers made lots and lots of movies prior to the "incentive" scam and they'd continue to make them without the bribes. The only thing that "incentives" accomplish is to allow producers to pocket more profits, not to make more movies and employ more people. Bribes also allow them to undermine Unions with the intent to depress wages and exploit labor.

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Tennessee Comptroller slams state incentives to film industry

 

http://www.bizjournals.com/memphis/news/2013/01/29/tennessee-comptroller-slams-state.html

Ed Arnold Digital producer and social engagement manager-Memphis Business Journal

In a report released Monday, Tennessee state comptroller Justin Wilson released a report damning the more than $7 million in incentives given to the film and television industry. In his report, Wilson says “auditors could find little to no evidence the incentives have led to new film producing facilities or permanent film jobs in Tennessee.”

In 2006, the Tennessee Film, Entertainment and Music Commission was given permission to finance incentives to attract film and television productions.

Auditors found that incentive payments were based on expenditures that often don’t meet program guidelines or have the proper documentation. The report also questions whether the incentives intended for Tennessee filmmaking facilities have been improperly awarded to out-of-state businesses.

Recently, the state granted $7.5 million in incentives for ABC’s production of its hit series “Nashville.”

http://www.comptroller.tn.gov/repository/SA/pa12029.pdf

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So they should tighten up their procedures before money gets handed out. The system in Ontario is very solid, and has a number of checks in the system to prevent fraud.

 

R,

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Bribes also allow them to undermine Unions with the intent to depress wages and exploit labor.

 

Waaaaaaa? Which school of economics did you graduate from? Tax credits have the exact OPPOSITE effect on local labour rates. Here in Ontario the unions demand MORE money because they know the producer is getting 30-40% of the wages refunded. So they ask for more money!!

 

Everyone knows the film industry is nomadic, always has been, always will be. Nothing new there.

 

As for undermining unions in general....I have zero problem with that. American and Canadian unions have driven millions of jobs to Mexico and China over the last 20 years. They have no benefit to society. They keep new up and coming film workers out of the labour market and create a protected job environment for existing members. A practice that is repulsive in free market economies like Canada and the USA.

 

R,

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  • 4 weeks later...

http://www.governing.com/columns/eco-engines/col-why-states-play-tax-incentive-game.html




 

Why States Keep Playing the Losing Tax-Incentive Game Elected officials and experts aren’t sure if tax breaks actually create jobs. So why do they keep offering millions of dollars worth of subsidies to companies?

BY: WILLIAM FULTON | MARCH 2013

If you sat down and drew up the ideal plan to invest $80 billion every year in economic development across the United States, you would think of a lot of exciting things. You could pour the money into research and form the basis for new product breakthroughs in a wide variety of fields. You could invest in America’s workforce to make it more skilled and flexible. You might assist manufacturing companies in upgrading their factories and equipment, or help universities attract the best students from around the world for science and engineering programs, or improve our transportation infrastructure.

The one thing you almost certainly would not do with $80 billion a year is create a decentralized system of providing tax breaks and other subsidies to profitable businesses in different economic sectors, often with little accountability for how the money is spent and no recourse if the company goes south. Yet, as a highly publicized series in The New York Times last December showed, this is exactly the system that state and local governments around the country have created over the past four decades.

Though the issue of economic development incentives has been around for a long time, the Times used solid footwork and a lot of groundbreaking data analysis to draw the most complete picture of our incentive system to date. By combing through a variety of databases, the newspaper’s reporters examined 150,000 incentive deals and came up with the $80 billion price tag. They also cast the story in David-versus-Goliath terms, clearly suggesting that unsophisticated government agencies -- especially local governments -- get snookered on a regular basis by slick corporations that often take the money and break their promise to deliver jobs.

The bottom line was depressingly familiar. When asked whether the tax breaks and subsidies actually created jobs, elected officials and economic development experts couldn’t say for sure. All they knew -- or so they said -- was that they didn’t dare not put these incentives on the table, for fear that the companies would locate or relocate elsewhere.

And therein lies the biggest problem with America’s decentralized economic development incentive system: It may or may not work. In fact, there’s considerable evidence that it doesn’t work, but it operates kind of like the ante in a poker game. Throwing the money into the pot doesn’t mean you’ll win the game. All it means is that you get to play.

Whether you win depends a lot on how the business sectors you are dealing with approach the poker game. Sophisticated businesses tend to play their poker hands based on skill. “Sure, we’ll take the money you ante up with, but that’s not really what we are looking for,” they’ll say. “We also need a skilled labor force, a good transportation system, connections to research institutions, perhaps a favorable regulatory environment -- because those are the things we really need to run our enterprises profitably and no amount of cash is going to make up the difference if these things are lacking.”

Manufacturing in the South is undergoing a renaissance in large part because both governments and companies play this game with skill. “Yes, we have incentives, low taxes, and light regulations, but we also have the things you really need as well,” government officials respond. It is no coincidence, by the way, that these other things are often place-based and hard to move, meaning the companies are less likely to skip town.

In other situations, however, governments and businesses play a very simple, bald game of up the ante. Some manufacturers insist on subsidies and promise jobs, but they take the subsidies and then leave town. General Motors’ up-the-ante approach during its bankruptcy was the subject of much of the Times’ reporting.

The film industry plays a similar game of, “If you’re dumb enough to give me your money, I’m dumb enough to take it.” Movie productions search all over the United States and Canada seeking ever more subsidies and tax credits. Some localities are just excited to land a Hollywood film shoot, while others try to use the shooting as a foundation to build a bigger infrastructure that will attract more value-added pieces of the business. But the bulk of the film business remains headquartered in Los Angeles, which has an enormous infrastructure that is virtually impossible to duplicate anywhere else. Even so, the studios still try to extract more subsidies out of the state of California, which is under constant pressure to up the ante -- or else.

The great comedian Jack Benny had a running joke with Ed Sullivan, the host of his namesake TV show, one of the most popular in America in the 1950s and ’60s. What would happen if Sullivan didn’t show up for his own show? Being on the Ed Sullivan show was the biggest thing in American entertainment, but Sullivan himself didn’t actually do anything. Pressed for an answer, Sullivan said he had no idea. Finally, Benny would delivered his classic deadpan punchline: “Don’t ever stay home to find out.”

That’s the dilemma states and localities in America face in dealing with financial incentives. A lot of the time they don’t seem to do anything. But no one knows whether the companies would turn up in town without them. So the politicians follow Jack Benny’s advice: They keep putting money on the table just to find out what will happen.


You may use or reference this story with attribution and a link to
http://www.governing.com/columns/eco-engines/col-why-states-play-tax-incentive-game.html

 

 

 

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As for undermining unions in general....I have zero problem with that. American and Canadian unions have driven millions of jobs to Mexico and China over the last 20 years. They have no benefit to society. They keep new up and coming film workers out of the labour market and create a protected job environment for existing members. A practice that is repulsive in free market economies like Canada and the USA.

 

R,

You couldn't be more wrong.

 

Unions haven't driven work out of the USA. The practice of Tax Bribes/Breaks and Subsidies have done that. If Unions were the problem, movies would have been made over the border decades ago at the rate they are now.

 

And your statement that Unions have "no benefit to society" could only be uttered by a wanna-be Aristocrat. Labor Unions came into being BECAUSE workers were being abused with inadequate pay and unsafe working conditions. It's because of Labor Unions that EVERYONE, even non-union workers, enjoy the salaries and hourly wages that have been established as well as, arguably, having a weekend, overtime pay, and safety regulations.

 

Labor Unions DON'T keep non-union people out of the workforce. I'm proof of that. I drove my little younger self to LA, went to work, and earned my way into union membership.

 

Unions aren't the problem. They are and always have been the solution to protect, not only individuals, but the economy as a whole. As more people earn more money, they spend more in the economy which stimulates other businesses to hire because of the increased demand. Following your model of destroying unions and undermining wages, everyone works less, earns less, spends less and then fewer people have money to spend to watch your silly Canadian movies. They'll save their limited funds to go see the "sure thing" coming from Hollywood and ignore the little movies which maybe they'll think about seeing someday on cable at home.

 

And finally, there is no true "Free Market" in the world beyond, perhaps, Somalia. What's more, there shouldn't be. The Austrian economic model is a proven failure. Milton Friedman even scoffed at the Reaganomic abomination that was crafted from the threads of Friedman's nonsense. Economies must be regulated, both from Government and from Labor. Without regulation and controls, wealth consolidates into the hands of just a few, the economy falters, and society degenerates away from democracy and into Corporate Fiefdoms where the serf-class scrambles for the scraps.

 

Perhaps you should read this to gain some enlightenment:

 

http://www.addictinginfo.org/2012/12/11/explaining-socialism-to-a-republican/

 

 

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Such nonsense. No worker in Canada or the USA needs a union to protect themselves from the big bad employers in 2013. There are thousands of pages of "labour laws" on the books that protect everyone. I was just talking to a friend who is on long term disability from a corporate job due to a heath issue. She is non-union, and her job will be there when she gets back because of the Canadian labour code that protects everyone.

 

Sure unions may have had their place and time, but those days are long past now. You would make us believe that evil corporations would be sending children into mines, if it weren't for unions in 2013.

 

Furthermore the level of corruption in union management is staggering! It's no secret that labour unions and organized crime have been in bed with each other for a long time. I have seen first hand how the Ontario Teachers Union threatens and intimidates any of their members that refuse to tow the party line. It's shocking that this is allowed in a country like Canada that supposedly has a Constitution protecting people's rights.

 

And as for....

"....watch your silly Canadian movies."

Ha Ha! Jokes on YOU! Canadians only watch American movies!!

 

R,

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In other news, this thread has run since Nov 2010. That must be an achievement on some level?

 

I'm surprised Bryan you did not post about the debacle surrounding the making of Oz The Great And Powerful in Michigan at the former GM plant.

 

Great story there for you!

 

R,

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Sure unions may have had their place and time, but those days are long past now. You would make us believe that evil corporations would be sending children into mines, if it weren't for unions in 2013.

 

 

That's precisely what would happen. The SECOND that regulations are lifted, profit-seekers take every opportunity, no matter how despicable, to increase their share.

 

Just look at a company like Walmart for example. To avoid being responsible for health benefits that full-time employees in the front office enjoy, they purposefully keep hours just below full-time while also keeping wages low. The result is that too many fall into the category of the "working poor" who must utilize our "social safety net" (foodstamps) to supplement their meager wages. You could respond like any "free marketer" and say, "Well, they can just quit!" But in your universe of non-regulated markets, where would that person go to work that is any better? And the company doesn't care because there is an ample supply of desperate unemployed people who will agree to be exploited for a few ducats thrown down from on high.

 

And you want to drop Labor unionization altogether because of so-called "corruption"?! It's only corruption to an Aristocrat because you don't like their goals which cut into your profits.

 

The very notion that business owners would "behave" and continue to treat their employees fairly without threat of legal action (or worse) is what is laughable. You are very naive, Mr. Boddington.

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In other news, this thread has run since Nov 2010. That must be an achievement on some level?

 

I'm surprised Bryan you did not post about the debacle surrounding the making of Oz The Great And Powerful in Michigan at the former GM plant.

 

Great story there for you!

 

R,

 

I would have no time for anything else if all I did was share information about every Tax Bribe debacle occurring around the world. I'd need a full time staff to keep up!

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In other news, this thread has run since Nov 2010. That must be an achievement on some level?

 

I'm surprised Bryan you did not post about the debacle surrounding the making of Oz The Great And Powerful in Michigan at the former GM plant.

 

Great story there for you!

 

R,

 

 

But here ya go, since you asked:

 

Just an excerpt:

http://www.nytimes.com/2012/12/04/us/when-hollywood-comes-to-town.html?pagewanted=all&_r=0

 

"As for the crew and actors, “the majority of them I think were from L.A.,” said London Moore, a local actress. Ms. Moore was the body double for Michelle Williams, who was playing Glinda. “I went into this thinking these people were probably going to be stuck up, but they welcomed me with open arms. They are like a family to me.”

Film Jobs Prove Scarce

The studio had created only 200 positions by the summer of 2011, according to correspondence between the company and local officials. And when temporary construction workers were excluded from the tally, Pontiac’s records show, the studio reported only two employees in 2010 and 12 the next year. The studio’s chief financial officer said it had not been able to cash in on $110 million in tax credits that were contingent on creating jobs. But the studio did cash in on other credits, including $14 million for a “Film and Digital Media Infrastructure Investment Tax Credit,” he said.

As the “Oz” shoot was under way, Pontiac moved on to its third emergency manager, Louis Schimmel, and he was not a fan of incentives. A former municipal bond analyst, Mr. Schimmel spent decades warning Michigan towns against trading tax revenues for jobs. “I’m just about the biggest critic of these programs, because giving away the taxes of the city is so detrimental,” he said. “The money is needed for police, fire and trash pickup.”

Mr. Schimmel said Disney had offered to prepay its workers’ personal income tax to the city, but Pontiac declined. The city later had problems collecting some of the taxes because Disney operated through a separate business entity that was difficult to track down, he said.

“This is a glamorous industry if you want to talk about Hollywood, but it’s not very glamorous for the municipality that wants to collect something,” Mr. Schimmel said. Pontiac, he said, was outgunned.

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