Entertainment industry tax credits are working

Dave sent me a link to Bid to Lure Films Works So Well, It’s Nearly Broke, which is an exceptionally lazy piece of reporting.

But the good news for the city’s film industry is a mixed blessing for the city’s treasury. In 13 months, the city has exhausted the $50 million it had allotted for four years’ worth of tax credits for the industry, while the state has used up most of the $125 million it has allotted over five years. It is not clear if new business spurred by the program is making up the difference.

And being the New York Times, they didn’t see fit to, you know, do any actual reporting or fact-checking.

Otherwise, after two minutes of Googling and a search on the New York State Department of Taxation and Finance site, they might have learned that January 2006 NYS tax revenues were up 18.6% over the previous January with personal income tax revenue up a remarkable 28.3%. (page 2 of the January 2006 Tax Collections PDF)

One hopes our elected public servants do better than to trust the Times’ lazy reporting at face-value. Cutting the tax credits would just screw everything up again.

This is the Laffer Curve in action, again. Lower taxes lead to increased tax revenues.

2 Responses to “Entertainment industry tax credits are working” Comments Feed for Entertainment industry tax credits are working

  • I don’t have an opinion one way or the other, but it seems like the article’s statement is more accurate than you let on. The increase in city-wide tax revenues almost surely isn’t entirely from business drummed up by moviemaking. Without a more detailed analysis of how much business is directly (or secondarily, or tertially) affected by moviemaking, all that can be said is that it isn’t clear.

    Better lazy reporting than reporting a correlation without any indiciation of causation.

  • I disagree. The article (now sealed behind behind the TimesSelect pay wall) failed to mention anything about the state of tax revenues. They created the false impression, amplified by the title’s “nearly broke”, that the state’s finances are a disaster.

    The exact opposite is true. State finances are in fantastic shape. The program is “almost broke” because they’ve been more successful than anyone ever imagined. Instead of saying they burned through four years worth of tax credits in 13 months, another view might say they attracted 48 months worth of work in only 13 months, nearly four times what was hoped for.

    By omitting details about tax revenues, either through laziness or malice, the author created the impression of a fiscal shortfall. Instead, people working on films are paying taxes in New York. Entertainment workers are buying from New York businesses. New York business owners are paying more taxes because they’re making more money.

    The program is hardly broken, it’s working better than anyone imagined.

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