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.
MPAA asserts that the number of films shot in Massachusetts increased sharply after the state started subsidizing them. But that’s not the whole story. As our report explains, Massachusetts also conducted the most thorough, independent study of a film tax subsidy to date, and that study found that the subsidy’s cost far outweighed its benefits:
The tax increases and cuts in services that states have to impose to pay for film subsidies take income and jobs out of the state’s economy, negating whatever small positive economic impact the subsidies may get by attracting new productions. States would be better off eliminating these wasteful tax breaks and using the freed-up revenue to maintain vital public services and pursue development strategies that may be less glamorous but are more cost-effective, such as investment in education, job training, and infrastructure.