Film Incentives Clearly Hurt

Neal Rubin laments the elimination of Michigan’s film incentive at The Detroit News. But he paints a false picture of the scholarship on this subsidy.

The incentives work — 37 other states currently have them — but at a cost. What cost, and what value, depends on who’s crunching the numbers.

There are plenty of policies where economists can find different effects, but the studies of film incentives are clear. As Dr. Michael Thom, a professor at the University of Southern California, recently wrote:

Think tanks from across the political spectrum — including the liberal Center on Budget and Policy Priorities, conservative American Enterprise Institute, libertarian Reason Foundation, and nonpartisan Tax Foundation — have argued that [film incentives] don’t succeed at creating jobs or growing the economy.

Scholars tend to agree. Multiple peer-reviewed studies suggest that tax incentives targeted at specific industries do not generate long-term growth. They do little more than lure states into a competitive bidding war, where each state tries to outdo the others by spending more and more on tax incentives.

Michigan policymakers closed down a program that cost taxpayers millions. They should look to the state's other so-called economic development programs.