As we explained yesterday, the claim that a state can’t boost revenues by raising taxes on upper-income people because they will just flee to lower-tax states is a myth. Those who propagate it frequently cite statistics that can sound convincing but are fundamentally flawed.
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If You Tax Them, They WON’T Leave
“Ladies and gentlemen, if you tax them, they will leave,” New Jersey Governor Chris Christie told state lawmakers last year in support of his proposed tax cuts. Many elected officials, journalists, and commentators state as a truism that residents — especially wealthy ones — regularly flee from higher-tax states to lower-tax ones. Only it’s not true, as our major new report explains.
The Twilight of Film Tax Credits?
State governments have acted like swooning fans toward the film industry for years, handing out tax subsidies to attract movie and TV productions, but they’re finally starting to take a more critical look. And they don’t like what they see: since January, 17 states have eliminated their film subsidies or pared them back.
Five Reasons Why States Can’t Create Jobs by Cutting Business Taxes
Despite large budget shortfalls, states like Florida, Michigan, and New Jersey are considering new business tax cuts in the hope that this will generate job growth. This strategy isn’t likely to work, for several reasons:
Cutting Film Subsidies — A Smart Call from New Mexico’s Governor
Monday’s proposal from Susana Martinez, New Mexico’s newly elected Republican governor, to cut the state’s tax credit for film and TV productions by 40 percent is a smart move. It’s also noteworthy because New Mexico started the wave of these state subsidies that has swept the nation over the past decade.
Our Documentary Versus Their Thriller
The powerful Motion Picture Association of America came out with six-guns blazing last week, claiming that our new report on state tax subsidies for film and TV productions is “politically motivated” and “slipshod” and that the Center itself is “biased” and “prejudiced.” But when you get past all the name-calling, MPAA’s press release doesn’t address — let alone disprove — our main argument, which is that these subsidies aren’t a cost-effective way for states to generate jobs and income.
Why State Film Subsidies Get Two Thumbs Down
Before releasing one of his movies, Mel Brooks gathered his cast and crew to thank them for their hard work. When asked how he thought the film would do, he quipped, “This movie will make millions.… Unfortunately, it cost millions.”
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