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Re: “Georgia's blank check to Hollywood

Ovdave,

A Georgia State Expenditure in the amount of $1 to pay for a road has the same exact fiscal impact as Georgia State Expenditure in the amount of a $1 tax credit that means it will not collect $1 in revenue. From a basic fiscal accounting perspective, the is literally no difference. At the end of the day, Georgia is out $1.

Now, are tax collections the state's money? Yes. Citizens pay taxes required of them by law. The money spent by Georgia on things like healthcare or education or roads or on stat police doe not belong, per se, to the government. It belongs to the taxpayers. If the production comapnies that got the subsidy actually owed income taxes in Georgia, then I would agree with you. Indeed, they would be getting to keep more of their own money rather than pay in taxes due. But they not pay or owe corporate income taxes in Georgia. Let me repeat, productions do not pay income taxes in Georgia. If they did, the tax credits would operate like most people assume they do--they would allow the recipient to use them instead of paying money to the state. But since the productions, 99.9% of the time, do not owe a cent, they sell them. This is why they are transferable.

Georgia isn't collecting "less" of "their" money. It's not collecting anything from them. At all. Instead, Georgia issues tax credits for 30% of their spending and those credits are sold for CA$H to very very rich people or companies at a slight discount. Typically, a $1 film tax credit goes for 90-cents. The person or entity that buys the credit pays 90-cents to the film company so it can save 10% on it's own taxes due.

To the average person on the street, most people want to know why these fat cats get a tax break and everyone else doesn't. Even if the vastly inflated number of 25,000 direct and indirect jobs tied to the film industry are accurate (they aren't), then it's still less than 1% of the state's population. The film incentive isn't bringing "massive benefits" to the citizens of Georgia....it's bringing job dependent on a taxpayer subsidy to these 25,000 workers. They benefit. Everyone else is paying for it.

If the people in the film industry (and the indirect positions tied to it) want to keep the subsidy, then perhaps they should agree to a 30% state income tax rate. At least that way Georgia will be breaking even on their subsidized wages.

4 likes, 0 dislikes
Posted by vfxer on 07/20/2013 at 1:38 AM

Re: “Georgia's blank check to Hollywood

Yo Adrian!

I'll put it another way. What's the difference if you don't collect the money from a Buckhead fat cat instead of not collecting it from a LA fat cat?

1 like, 2 dislikes
Posted by oydave on 07/19/2013 at 8:12 PM

Re: “Georgia's blank check to Hollywood

"roughly $30 million was already the state's money."

See, this is the basic problem, one of outlook or point of view. It's not the state's money. It's the money of the person or entity who purchased the credit. In your view, I guess, all money belongs to the government, and they let us keep our share of it and take the rest. The way I look at it, the money we make is ours and the the taxes are the government's money only after we give it to them.

"each $1 credit paid out"

There you go again. It's not a payout.

I agree that it's difficult to determine whether the state is seeing more tax revenue from new business activity than it is forgoing in full taxation of said activity, but the fact remains that it is new revenue that would not have been there, anyway, absent the tax credits. Even if I grant your erroneous assumption of the way government works, the massive benefits to citizens and businesses still remain. Slight detriment to the state trumps great benefits to the citizen...every time. Yeah, if you want to call not taking a dollar spending a dollar, a la the Louisiana studies, then, yes, there is no way ANY tax credit program would EVER be worth it.

I'm sure that's the view that a lot of statists want to prevail, but it ignores the facts that they find inconvenient, and it ignores the success of such programs. It will forever be, "Yeah, well, that's great but the state lost money."

Also you can not deny that, over the period of this program, state tax revenue has been increasing, from whatever source and for whatever reason, so it is most definitely is not hurting the state. Is it that you just can't sleep at night knowing that some potential tax dollar goes uncollected?

"How dense are you? I noted another form of state activity for an industry."

No, you threw that non sequitur at me because you could not defend your assertion. At least this other guy has some structure and logic to his erroneous assertions.

"I have no idea what that "sentence" means."

I'm not surprised. "All you base are belong to us..." is a widely known internet meme known by anyone who is plugged in to what's happenin.' Try googling it. Hint: it's a way to make fun of people who use poor grammar and syntax.

1 like, 1 dislike
Posted by oydave on 07/19/2013 at 6:28 PM

Re: “Georgia's blank check to Hollywood

"YOU said it."

How dense are you? I noted another form of state activity for an industry.

"All your base are belong to us...."

I have no idea what that "sentence" means.

Posted by Albert Maguffin on 07/19/2013 at 4:26 PM

Re: “Georgia's blank check to Hollywood

I do not deny the economic activity from film spending. Clearly, if a $100 million movie comes to town, then it spends that huge amount of money at lots of places and hires lots of people. And all of that is great. Not so great, however, is the fact that you had to give up (fine, not spend) $30 million in tax revenue that you would have otherwise collected.

And since the $30 million in tax credits, which the production converts to cash by selling them, is used to pay for the cost of the film, that really means that of the $100 million spent, roughly $30 million was already the state's money.

Some would say, "so what. we still had $70 million in impact". True. But in order for the program to pay for itself (much less make money), that $70 million in private economy spending would need to generate $30 million in new taxes. And that is mathematically impossible.

Louisiana has a 30% rate. Unlike Georgia, they have commissioned no less than five economic impact studies. All of the reports (which look at direct spending AND indirect impacts) show the state only recoups about 18-cents for each $1 credit paid out. Louisiana sees it as an investment. They KNOW they lose money on this. But they are ok with that. Georgia film backers should take the same approach.

Jobs Yes. Spending Yes. Making money for taxpayers NO.

7 likes, 3 dislikes
Posted by Adrian H. McDonald on 07/19/2013 at 4:07 PM

Re: “Georgia's blank check to Hollywood

You are neglecting the economic activity that results from the productions that come to the state...and even with your dour angle on it, the state does not expend resources. They are foregoing a portion of as yet uncollected monies...all with a purpose in mind, to attract new business that brings a host of benefits.

All of these criticisms hinge on the twisted view that not collecting a buck means that you spent a buck...and that the three bucks spent by the guy, from whom you didn't collect it, doesn't count.

Since the state has posted a big surplus in tax revenues recently, it's obvious that this program isn't hurting the state. Surely you can admit that, even if you won't recognize the benefit.

1 like, 3 dislikes
Posted by oydave on 07/19/2013 at 3:57 PM

Re: “Georgia's blank check to Hollywood

The 70% of something is better than 100% of nothing logic sounds great, but it's fundamentally flawed.

Many people think that a production company that goes, for example, to Georgia to make a film is getting a reduction on its taxes of 30%. To the misinformed film backer, the state is still getting the other 70% of the new company’s taxes that would not have come to Georgia in the absence of the film incentive. If this were actually how the film incentive worked, the “70% of something is better than 100% of nothing” talking point would have merit. But this is NOT how film incentives work. Film incentives represent cash, directly (from refundable tax credits) or indirectly (from transferable tax credits) that production companies use to finance their project.

So when $200 million in tax credits are purchased by wealthy Georgians or resident corporations, they use the credits to satisfy their taxes rather than sending actual money. Result: Georgia is OUT $200 million in revenue that it would have collected but for the film subsidy. This is a huge cost.

5 likes, 1 dislike
Posted by Adrian H. McDonald on 07/19/2013 at 3:38 PM

Re: “Georgia's blank check to Hollywood

"Seriously? "the KIA deal has nothing do with the tax credit" No shit. Who said it did?"

"It's not just a matter of cutting checks to film production companies. We (GA) gave away our soul for Kia and also PAID for infrastructure"

YOU said it.

" I didn't even have waste my time reading any further with that statement nor will I."

All your base are belong to us....

1 like, 0 dislikes
Posted by oydave on 07/19/2013 at 3:23 PM

Re: “Georgia's blank check to Hollywood

Seriously? "the KIA deal has nothing do with the tax credit"

No shit. Who said it did? That was the final nail for me with that sentence that you are either more uninformed than I thought or worse.... I didn't even have waste my time reading any further with that statement nor will I.

Reread my statements until you understand them.

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Posted by Albert Maguffin on 07/19/2013 at 2:56 PM

Re: “Georgia's blank check to Hollywood

"Good FOR my state"...it should say.

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Posted by oydave on 07/19/2013 at 1:12 PM

Re: “Georgia's blank check to Hollywood

As someone who works in the business, and has been here before the tax incentive, I promise you, this business is bigger than anyone can grasp. Thousands of people have jobs. Thousands of local vendors are benefiting (dozens that RELY on this industry.) In my department alone (with one of the smaller budgets in a production,) I am spending a minimum of 1 million dollars, with about 60% of that going to LOCAL labor. In three months. IN ONE SHOW. The show that I am on now is about 15 times bigger than the ones before. That is over $10 million dollars in local wages, on ONE show. We can sit here and argue economics all day, but I will take 70% over NOTHING. These out of state people that come in pay taxes and spend money the ENTIRE time they are here. From tourist attractions, to housing, to meals three times a day. Who cares if these million dollar companies are getting a tax break? I can give you thousands of names of people who are benefiting also! And PLEASE remember, the current deficit and issues with this state have nothing to do with the fact that we are making Georgia more appealing. It is only going to help this state. Every show I have worked on, and spoken to out of town people in this business all say the same thing....they've seen incentives before, but it has never been done right, and Georgia is on it's way to doing it right! We NEED this business to stay.

3 likes, 1 dislike
Posted by CLC on 07/19/2013 at 1:08 PM

Re: “Georgia's blank check to Hollywood

"Once again you demonstrate your lack of understanding"

No, I demonstrate my penetrating insight to the fact that you have no idea what you're talking about. The Kia deal has absolutely nothing to do with the film production tax credit. Every one of these programs is different and separate from the other. It is true that the state has spent money to persuade these heavy industries to locate here. The merits or demerits of that has nothing to do with the subject at hand. The plain fact of the matter is that the film program costs the state nothing and attracts many high paying jobs, business for merchants and the intangibles of prestige. The fact is that you were talking out your ass about something you have no clue about so you deflected to some BS about something else.

I am on no crusade. I just like to correct ridiculous sniping by wanky, knee jerk, know nothings regarding something close to me and good my state...sweet, merciful, bountiful, beautiful Georgia. You anti-business, anti-capitalist types are the ones on a "childish ego driven crusade."

3 likes, 2 dislikes
Posted by oydave on 07/19/2013 at 11:13 AM

Re: “Georgia's blank check to Hollywood

Once again you demonstrate your lack of understanding. It's not just a matter of cutting checks to film production companies. We (GA) gave away our soul for Kia and also PAID for infrastructure... for a company that sits near AL (great for KIA to have access to their sister Hyundai plant in AL) which means WE paid for at least some Alabama resident to have jobs on top of everything else in a state and region whose creed is small guv'ment at all costs and free market at all costs.

Yet they practice big guv'ment and socialism.

None of this matters, you just want Atlanta mentioned next to LA no matter the cost or context of it all... and at the end of the day, that's not going to happen. We've seen this with other cities as well. But by all means go on with your childish ego driven crusade....

3 likes, 3 dislikes
Posted by Albert Maguffin on 07/19/2013 at 10:38 AM

Re: “Georgia's blank check to Hollywood

Please detail to whom and for how much the state has written checks in this film production tax credit program...also, if you have this information, why didn't you post it in one of your two posts already?

3 likes, 1 dislike
Posted by oydave on 07/17/2013 at 8:37 PM

Re: “Georgia's blank check to Hollywood

Go to school indeed if you don't believe that the state spends money at all.
Seriously? How naive are you?

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Posted by Albert Maguffin on 07/17/2013 at 4:23 PM

Re: “Georgia's blank check to Hollywood

The question, of course, boils down to an exciting and lucrative new industry or nothing at all-- for better or worse this is the culture and business of film production today-- and as pointed out above 70% of something (lately a lot) beats 100% of nothing. While not all tax breaks make sense, the Ga Film tax incentive in this case has created a whole industry where the was next to nothing-- seems like a pretty good deal to me--

Posted by vx on 07/17/2013 at 8:18 AM

Re: “Georgia's blank check to Hollywood

Maguffin...clever.

"it's the businesses, that are benefiting the tax credit. By publicity. Second, Although the State of GA seems to be increasing; where are the funds coming from? I mean, offering $75million tax breaks for film!? seriously? While our schools are closing because of funds."

Not deserving of a response due to no detectable cranial activity...BUT...here goes, anyway...

For the millionth time, the state is not spending any money, not spending any money, NOT SPENDING ANY MONEY! Go to school, understand the subject and then try again. To reiterate from the guy above, who DOES understand it, 70% of something is more than 100% of nothing.

Tangentially, to play your ignorant game, what is wrong with businesses benefiting? What happens when businesses benefit? Workers get a paycheck and the business and the workers pay taxes so the state can fund your precious schools, which aren't closing due to lack of funds, by the way.

I am not optimistic that any of this is getting through...judging from the syntax, the grammar and the total ignorance of basic economics.

4 likes, 2 dislikes
Posted by oydave on 07/16/2013 at 6:06 PM

Re: “Georgia's blank check to Hollywood

Ok. Is it me, or is there a serious problem here? First off, it's the businesses, that are benefiting the tax credit. By publicity. Second, Although the State of GA seems to be increasing; where are the funds coming from? I mean, offering $75million tax breaks for film!? seriously? While our schools are closing because of funds. This just doesn't make any sense to me at all. And last, Offering a tax credit to the film industries is only affecting us "the average GA citizen that tries to make a $1 out of 0.15 cents" You figure it out...

3 likes, 2 dislikes
Posted by Niki12) on 07/16/2013 at 3:59 PM

Re: “Georgia's blank check to Hollywood

sodisappointed you joined just to criticize this article with blind boosterism...?

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Posted by Albert Maguffin on 07/16/2013 at 3:47 PM

Re: “Georgia's blank check to Hollywood

That's some pretty dense nonsense.

WTF does having a film festival that meets your artsy requirements have to do with producing films? And how is Pinewood Studios, one of the most prestigious movie production outfits investing millions in a facility at all transitory or "opportunistic, quick buck" in nature? Google Pinewood Studios and then tell me it's a "bottom feeder."

Again, for you deep thinkers who have trouble thinking, the state is not laying out a single dollar for this activity. It is giving up a share of monies that it would not have collected anyway if the business had gone to another state. It is impossible to lose on this deal. Why is that so hard to understand?

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Posted by oydave on 07/14/2013 at 9:31 AM

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