The American Federation of Musicians is fighting mad at their Hollywood paymasters. What could separate these two institutions of liberalism? Cash, of course. AFM is upset that Marvel’s Iron Man 3 decided to go abroad to use foreign musicians for cheap. John Acosta, vice president of AFM Local 47, summed up the case against Marvel: “Marvel is unfair to musicians because they take tax breaks from states but when it comes to doing a score for their movies, they outsource the work overseas. We’ve been protesting and raising the alarm about this over two years since Iron Man 1 and we feel those jobs belong in the US.”
For years, individual states have been reaching out to the film industry in an attempt to woo Hollywood dollars. Recognizing the business-hating climate of Los Angeles, even liberal governors are trying to outcompete the Hollywood locals by handing out tax breaks and incentives. While Gov. Jerry Brown has handed hundreds of millions in tax breaks to film and TV producers to keep them from fleeing to venues such as Vancouver, other states are chipping in to pitch woo. Maryland’s Governor Martin O’Malley has tripled Maryland’s film tax credit program to $25 million from $75 million. Massachusetts handed over $4 million in tax credits in 2011. Currently, 28 states give film tax credits, and a full 44 states have incentives for Hollywood. New York State recently passed a bill specifically designed to bring The Tonight Show back to the state – the bill actually had a provision that called for special incentives to seduce “a talk or variety program that filmed at least five seasons outside the state prior to its first relocated season in New York.” That show had to have a yearly budget over $30 million and a studio audience of 200 people to receive a tax credit worth about $10 million annually.
Do these tax credits help states? Of course not. According to Eileen Norcross of the Mercatus Center at George Mason University, “From Massachusetts to North Carolina, Michigan and Iowa, a similar picture is emerging: Film tax credits don't deliver to state economies what they cost to treasuries and taxpayers.” Massachusetts lost cash on their deal – two-thirds of the spending generated by the film credits went out of state, and a whopping 47% of the wages generated went to those evil one-percenters earning over $1 million.
Nonetheless, overall, Hollywood receives $1.5 billion in tax handouts every year. Glenn Reynolds wrote in the Wall Street Journal: “Of the nine ‘Best Picture’ nominees in 2012, for example, five were filmed on location in states where the production company received financial incentives, including ‘The Help’ [in Mississippi] and ‘Moneyball’ [in California].”
Now, however, the states can’t pull out. If they do, there are foreign governments willing to step in. China has enormous incentives for filmmakers, especially given access to China’s 1 billion citizens. Of course Hollywood may have to snip some outwardly pro-America material and trim around Chinese villains, but that’s a small price to pay when moolah is on the table.
Meanwhile, Hollywood’s unions stew.
Unable to adjust to the new reality of free-flowing commerce, still enjoying the fruits of rich union contracts that end of disenfranchising thousands of would-be workers in Hollywood, members of the unions are the last of a dying breed. It’s still great to be a member of SAG-AFTRA. But it’s tough to use your card when jobs are rushing off to Europe and Asia.
Sooner or later, the union members themselves will get tired of holding a union card that actually means unemployment. All the liberals who run Hollywood are liberals up until the point when they have to sign a check. Then they take their checkbooks and run to the nearest bidder, leaving their friends in the unions crying on their doorstep.
Freedom Center pamphlets now available on Kindle: Click here.