Skip to comments.Record Profits for Warner Bros. Doesn't Stop State From Giving Company Huge Subsidy
Posted on 01/15/2014 6:33:54 AM PST by MichCapCon
While Michigan taxpayers prepare to dole out $35 million to Warner Bros. for the filming of the expected blockbuster Superman-Batman movie sometime early in 2014, the company could be in for record profits.
In 2012, Warner Bros. had an operating income profits that exclude interest and income tax expenses of $1.2 billion, according to The Hollywood Reporter. That's about the same amount the state of Michigan gives in general fund dollars to higher education and community colleges.
Warner Bros. is projected to spend $131 million in Michigan while filming the Superman-Batman movie, according to the Michigan Film Office.
"The question of why such a profitable industry needs such a leg up is an interesting one," said Scott Drenkard, an economist with the Tax Foundation, a tax policy think tank in Washington, D.C. "I don't think the film tax credits are good policy."
Drenkard said when a company like Warner Bros. gets a tax break, other businesses that aren't favored by the state have to pay more.
Michigan's film incentive pays up to 35 percent of expenditures made in state by a production company.
Politicians like film credits because the credits give them a chance to rub shoulders with celebrities, Drenkard said.
As an example, he cited a situation where Maryland Gov. Martin O'Malley posted a photo in November on his Facebook page of himself with Seinfeld actress Julia Louis-Dreyfus while she was filming HBO's "Veep" in Baltimore.
In 2008, filmmaker Michael Moore questioned the logic of giving billionaire dollar corporations millions of taxpayer dollars via film credits.
"These are large, multinational corporations Viacom, GE, Rupert Murdoch that own these studios. Why do they need our money, from Michigan, from our taxpayers, when we're already broke here? I mean, they play one state against the other, and so they get all this free cash when they're making billions already in profits. What's the thinking behind that?" Moore asked at a film festival in Traverse City.
However, that didn't stop Moore from taking more than $840,000 in Michigan taxpayer dollars from film credits for his own movie, "Capitalism: A Love Story," which criticized special deals from government to corporations.
Time for government to stop subsidizing Big Entertainment.
I don’t get it. We criticize California for raising taxes on businesses and driving them away, but then we criticize Michigan for giving businesses tax breaks to lure them to the state.
Tax credits is not the same thing as giving money except to Marxists.
What they don’t get is lowering taxes works to bring business, they just like to pick and choose which businesses.
Pray America is Waking
what a big fat hypocrite...
Time for Hollywood to pay their fair share.
(I love using leftist rhetoric on leftists)
I dont get it. We criticize California for raising taxes on businesses and driving them away, but then we criticize Michigan for giving businesses tax breaks to lure them to the state.
I don’t get it either. Either you think government should provide businesses tax breaks so they can bring jobs to your area or you don’t. Don’t wanna do this? You sure sound like a Socialist to me.
“Would it not be the state involvement in BOTH situations?”
Not sure what you mean. The states kind of have to be involved in state tax policy, don’t they?
My view on economics is that wealth is only generated by three things: work, innovation and the exploitation of natural resources. Drilling for oil produces wealth because oil is converted to energy which is converted to work which is converted to wealth. Growing crops produces wealth directly because food has value even when currency fails (it is more valuable than dollars).
All other commerce moves wealth around. Other money-making activities, such as entertainment, do serve important purposes because accumulating wealth is not the purpose of life. On the other hand, we need policies that foster the growth of wealth by rewarding those who work, those who exploit resources, and those who innovate.
Hollywood should not get better tax advantages than businesses that actually create wealth.
It’s amazing the changes in stance of a government system. Cartels run the country, and people are fed up with the Gov inaction or lack of a spine to stand up to these cartels, so they form their own posse to protect their livelihood and neighborhood and the Gov cracks down on them.
Gov’s seem to be like emotional children that wave with the wind...No spine, no stamina, no guts. If they can’t protect the people then what good is it to have a government?
Also the US Gov DEA needs to stop dealing with “terrorists” or otherwise known as “drug cartels” and hindering the efforts of the Mexican Gov as well by introducing more money via drugs and guns “Fast & Furious”...across the border...Very sad state of affairs. And the poor people caught in the crossfire because of profiteering and Gov inefficiency...