Two sides in film incentive debate
Published July 18, 2014
by Patrick Gannon, The Insider, July 14, 2014.
It's looking like the current film incentives program may be scrapped for a much different grant program for TV and movie production companies.
Other possible outcomes of this year's legislative session include extending the current program or eliminating film incentives altogether. The existing legislation – credited with the recent surge in filming in North Carolina – offers a 25 percent rebate on spending by production companies. Without lawmakers' intervention, the perks expire at the end of the year.
This is one of the bigger debates going on in Raleigh these days. To catch you up on the controversy, here are three reasons why the program might be extended and three reasons why it might be eliminated.
Extend it
- Jobs. A recent film industry study found that the industry provides more than 4,250 full-time jobs and thousands of part-time jobs. With such a focus on jobs and the economy these days, it would be difficult for lawmakers to allow the industry to pack up and leave. The employment numbers can be debated, but no one can say the industry doesn't create jobs.
- Charlotte and Wilmington. Much of North Carolina's filming takes place in and around these two cities, so it's not surprising that officials from these areas are the most vocal supporters of extending the program. Wilmington, known as "Hollywood East" and "Wilmywood," would lose some of its identity if the incentives were eliminated and production companies chose other states. The reverse of this is that many counties haven't seen any impact from filming, and lawmakers represent those areas, too.
- House Speaker Thom Tillis. Tillis, a Mecklenburg County Republican, has supported film incentives in the past, and the industry is lobbying him aggressively to extend the program. Tillis is also running for U.S. Senate, and film supporters have warned that he would lose votes if he doesn't protect the incentive. Tillis' race against Democratic U.S. Sen. Kay Hagan is expected to be close.
End it
- Cost. Jobs, tourism and other economic benefits created by the industry don't come without a cost. The state paid out $60.1 million in the 2012-13 fiscal year. Incentive opponents say that money would be better spent on other priorities, such as teacher pay and roads.
- Tax reform. Eliminating tax breaks and incentives that support one industry over others was one of the major aims of the Republican-led tax reform initiative. If Republicans allow the existing film program to continue, they risk looking like they're picking winners, which they've railed against repeatedly. The other side says many other tax breaks still exist, too.
- Questionable projects. Opponents point to a few companies that received generous amounts in film incentives without providing much of an economic boost. Two late-night talk shows, for example, received a combined $300,000 in refunds after spending a few days in the state during the Democratic National Convention in Charlotte. And when ABC's "Extreme Makeover: Home Edition" filmed two episodes in North Carolina, its production company claimed $590,000 in incentives.Film supporters say they don't see that as "abuse" of the system because those projects complied with the law as its written. But incentives laws certainly could be written tighter to prevent questionable projects from cashing in.
July 18, 2014 at 7:25 pm
Norm Kelly says:
First, a major overhaul of the state tax code is an excellent idea. Easy, no. Necessary, yes. Of course, the same could be said of the national tax code, which is overwhelmingly stup1d in it's size and regulations.
Second, the point about picking winners & losers is spot on. No government should be involved in this. Every business should be treated exactly the same. No incentives for ANY business.
Third, it is ABSOLUTELY true that in order to give an incentive to one company or group of people means that other companies or groups of people are penalized. There is NO FREE MONEY in government. Regardless of what kind of trash you hear from your friendly politician or from almost every demon pol, the government HAS NO MONEY OF IT'S OWN! The only way ANY GOVERNMENT gets any money is to TAKE it from someone. That someone could be an individual or a company, it's all the same. It has been said that businesses DON'T pay taxes. There's not a single lib pol who believes this is true. But facts are things typically ignored by lib voters and absolutely ignored by every lib pol. So the fact that libs don't recognize the fact that businesses don't pay taxes has no bearing on the fact that businesses do NOT pay taxes. This is an indisputable fact. And our tax code should acknowledge this fact. Our tax code currently does NOT recognize this fact. I'm guessing that is mostly due to the fact that the demon party controlled Raleigh for slightly more than a century.
Instead of picking winners & losers in the tax code, how about we have legislators re-write the entire code to reflect reality. Every single person pays sales tax. This is how we get everyone involved in having a dog in the fight. So, make sure the sales tax applies to everything - regardless of what the product or service is, the sales tax should apply. No exemptions. Every product, every service, charge the exact same sales tax rate! Plain & simple. No exceptions, no special carve outs, no special 'weekend' when some items are tax free to encourage whatever the heck it is the demon party was trying to encourage. This is when problems are created.
Second, make sure the tax code reflects that businesses do NOT PAY TAXES! Stop charging ANY business any tax - local government property taxes should be allowed, federal taxes outside of state control would have to be allowed, but business income for any business doing business IN NC should not be taxed.
Then all income tax rates for any individual should be the same across the state, across the economic spectrum. There should be NO ONE who is allowed to live in the state, take advantage of state benefits (parks, roads, recreation, etc.) without paying for it. The tax RATE should be the same regardless of the AMOUNT of income earned, or the source of the income. To PEOPLE, not businesses. The person making $10,000 per year should pay the same RATE as the person making $1Million per year. Even with the same rate, the millionaire is still paying more to the state every year, so why do libs/socialists believe it's morally right to penalize that person even more? This is an item that libs are never able to defend, nor do they usually try. Even the occupier says that he wants to level the playing field, make sure everyone has the same opportunity to succeed, but then he goes on to say that once you succeed it is his strong desire to punish the heck out of you with income taxes and other types of taxes. No one should be allowed to succeed without paying a hefty fee to the feds. So long as everyone has the same opportunity to succeed, that is. Once you have succeeded, it's generally the libs idea and definitely the occupiers idea that you should be penalized into submission to the central planners for having the audacity to succeed 'too much'. Whatever that means! Talk about an id10tic idea!
There is a level for both the sales tax and income tax rates where the state would get sufficient revenue to take care of what the state should be taking care of. Sales taxes on things like auto fuel (gasoline) should also be set at the same rate as the general sales tax, not a special rate for gas different from any other sales tax. And non-traditional fuel vehicles need to be taxed or pay a fee that would be equivalent to the amount that would be paid if it were a traditional fuel vehicle. These cars still use roads & bridges, so they need to pay for this benefit, regardless of how little traditional fuel they use. A driving tax is a driving tax, regardless of the vehicle you drive. And it might be possible to 'tax' based on miles driven within a year rather than a fuel tax. This would eliminate the sales tax on gasoline altogether and levy a tax/fee evenly on ALL vehicle types based on the amount the roads/bridges are used by each vehicle.
There's a way to achieve equity in the tax code. It hasn't been found by our politicians. And it won't be found by those who want to have carve outs for specific groups or activities. The only level playing field, contrary to lib/socialist schemes, is an actual level playing field where EVERYONE is treated exactly the same. I don't have all the answers, certainly not in a 'short' reply post, but this is a beginning, and it's logical. Which is probably another reason pols don't get it and it makes zero sense to any lib!
