It's true, some people do have a hard time with math. For instance take the 30% on labor part of the incentive. This is take from a gross earnings number. That means if an employee makes $1,000 the film company will earn $300 in credits for having paid that individual. The employee will never have that $1,000 in their pocket to spend however because it was a gross number, they will take home only about $600.
State sales tax is only 4% and the income tax is bracketed from 1% to 6%. So lets start back over at $1,000, the state will make at most only 6% for that employee to have been paid, or $60. And even if that individual spent all the money they made gross would only recoup 4% in sales tax, or $40. But since they don't take home the entire $1,000 they made in gross, they will only have about $600 to spend, so the state can only make 4% off that if they even spend it all. So at best the state will have taken in $100 total in income and sales tax for the $300 they spent for one person to make $1,000. In reality the amount they take in is more like $84 because the net amount the employee actually has to spend in take home money, but again, if they spend all the money they take home.
There is nearly no mathematical way that the state can make back the 30% or the $300 they paid for one person to have a $1,000 paying job. This doesn't take into account big expenditures the productions make the 30% on such as one actors salary, or all the other out of town people who come to work that make huge amounts then leave the state and go spend their money elsewhere. This is where Louisianan lost money and had to rewrite their incentives about 5 years ago.
If you believe in trickle down economics then perhaps you can support this idea that if someone spends a dollar someone else will have a dollar to spend. However since every time a dollar is spent is shrinks, it seems like a loosing proposition.
Creative Loafing Atlanta
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