Today is May 26, the anniversary of the Quill v. North Dakota decision of 1992, when the U.S. Supreme Court upheld “the continuing validity” of restricting state sales tax powers only to businesses with property or...
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Kevin Spacey at Annapolis Bar Tonight to Lobby Legislators for Subsidies
Kevin Spacey is my favorite actor—I spent my entire recent vacation flight watching his movies—so it’s hard for me to say bad things about him. But he’s also a celebrity with an alleged net worth of $80 million lobbying for tax subsidies from Maryland taxpayers:
Gerard E. Evans, an Annapolis-based lobbyist for the show, has invited the entire Maryland General Assembly to a local wine bar to meet the two-time Academy Award winner who plays the scheming Vice President Frank Underwood in the series. An invitation describes the event as “an evening of Annapolis, D.C. and Hollywood.”
“He’s coming to promote ‘House of Cards’ and the tax credit,” Evans said of Spacey. “He loves Maryland. He’s got a house here.”
The visit is scheduled just a few days after the Senate voted to increase the amount the state can spend next year, to $18.5 million, on a tax credit that rewards movie and television production companies that choose to film in Maryland. “House of Cards” has been the biggest beneficiary in recent years.
Media Rights Capital, which produces House of Cards, which has already received $26 million in subsidies from Maryland taxpayers, had threatened to relocate production (presumably to DC) if more wasn’t coming. This puts to rest the myth that these subsidies just need to lure companies and other factors will keep them and build a permanent industry: the reality is that as soon as the subsidies end, they leave.
I know it's tough doing business in Maryland, what with those high taxes they have on everything. I wish they could focus on cutting taxes for all businesses in Maryland, not just one wealthy out-of-state business that happens to have an awesome wealthy spokesperson.
As we previously said:
- Film production only creates temporary jobs, and companies can leave at the drop of a hat. The Maryland Film Office estimated that House of Cards Season 1 “resulted in local hiring of 2,193 Maryland crew, cast, and extras” but it’s pretty clear based on the letter above that companies can bolt the second they get a better deal. And those jobs aren’t available once filming wraps up.
- Programs do not “pay for themselves” as is often touted. Proponents will argue that increased economic activity will create enough new tax revenue to make up for the initial loss of revenue from the credit. That’s not true. In fact, film tax incentives are a net loss to states, and there are plenty of studies demonstrating this.
- Estimates of economic impact should be taken with a grain of salt. As we noted a few years ago: “[a]dvocates rightly point out that one dollar of film spending trickles through the economy and creates more economic activity. For instance, if a film production spends one dollar on wages for a worker, that worker will take that income and spend it in the economy, creating income for others, and so on…But the fact that film productions impact the broader economy is not unique to this industry.” If those dollars from the State of Maryland weren’t spent on film production, they’d be spent on something else and still cycle through the economy. Those 2,193 employees the Maryland Film Office is touting likely would have happened anyway.
More on film tax credits here.
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