The Manhattan Institute’s Josh Barro made this excellent comparison in his recent article, Film Tax Credits Are An Unaffordable Luxury:
Maine has no auto manufacturing plants, but it’s not out there offering to pay Ford 30% of the cost of each car built. This is because bribing people to do business in your state is not a sustainable way to grow the economy.
Unfortunately, that is what many states, including Pennsylvania are doing.
Pennsylvania is one of the 44 states that offer subsidies to filmmakers to incentivize in state production and it is among the 26 foolish states that offer transferable (or in some states refundable) film tax credits to producers. Meaning if the film tax credit is more than the actual state taxes the filmmaker owes, they can sell the remaining credit.
There is film tax credit does not result in net economic gains to the Commonwealth. The Tax Foundation reports that states are showing less than a 20 cent return in taxes for every $1 in credits given away.
Pennsylvania ranks second in “economic development” spending to Ohio, using over $750,000,000 in taxpayer funds to bribe businesses with subsidies to move to or remain in the state. To get Pennsylvania back on the right track we need to eliminate corporate welfare programs and reduce taxes for all businesses.