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Reason Foundation

CA Taxes Are Killing Hollywood

Adrian Moore
July 13, 2009, 11:32am

California's share of U.S. feature film production dropped to 31% in 2008 from 66% in 2003, according to the California Film Commission. That largely reflects a falloff in the Los Angeles area, where feature filming activity in 2008 was nearly half what it was at its peak in 1996.

Television production, which recently has been a more reliable source of jobs in the region, is also declining. A recent survey from FilmL.A. Inc. found that 44 of 103 TV pilots this year were shot in such disparate locations as Canada, Illinois, Georgia, New York, Louisiana and New Mexico.

The rest of the article is interesting for two reason.  First, it details the 2nd order effects on all the businesses that support film and TV show making in the LA region.  Second, it blames the problem on:

More than 30 states have sought to outbid one another with tax credits and rebates aimed at luring productions away from California. Sacramento has responded with its first-ever film-tax credit program, but most analysts think the credits are too small and restrictive to have much effect.

But that misses the mark. If CA had reasonably low taxes to go with its great location, the state would not need "tax credits" for showbiz in order to be competitive.  And of course, every other type of industry is tempted to leave the state for the same reason. Rather than tax credits for the businesses that are popular in Sacramento, bringing California down from near the top in total tax burden to at least the middle, or better yet lower than average, would be a powerful incentive for showbiz and other industries to stay in CA or come here.

Hat tip to CA Political News.


Adrian Moore is Vice President, Policy


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