The Congressional Budget Office (CBO) has released its 2015 to 2025 Budget and Economic Outlook. In this yearly publication, the CBO examines current laws (taxes and spending) and projects the outlook for the federal...
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- More on Iowa Film Credits and Why Tax Reform is So Diffic...
More on Iowa Film Credits and Why Tax Reform is So Difficult
Bill Ahern blogged earlier on a bill introduced in the Iowa General Assembly last week would eliminate the state's $50 million film tax credit program. As Bill notes, the tax credit for movie productions has become a poster child for tax subsidy corruption and abuse. Corruption and abuse aside, film tax credits are a bad use of tax policy. See why here.
The day after the bill was introduced representatives from various film industry organizations showed up at a House Economic Growth Committee hearing to beg lawmakers not to repeal their special tax break. This provides a lesson that helps answer the question of why many tax expenditures are so hard to get rid of. The benefits are concentrated within a relatively small pool of individuals or businesses, in this case mostly the filmmakers, that will fight tooth and nail to keep their carve-outs, while the costs are dispersed among the rest of the taxpayers who individually are not likely to have a large incentive to fight the special interests. Hopefully Iowa's lawmakers have the rest of the taxpayers in mind and will repeal the film tax credit.
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