The Magnificent Seven is a 1960s movie about heroes who rescue a small village from looters who were raiding food and supplies. Unsuccessful in protecting themselves, the villagers look to a group of seven gun fighters for help. Despite the poor pay they were offered and great personal risk, the gunmen were committed to doing the right thing. They lead the fight to defeat the bad guys and taught the villagers how to protect themselves so never again would they be taken advantage of.
Here are seven reasons why the General Assembly needs to come to the rescue of the North Carolina taxpayer:
- The refundable 25% credit to the film industry means NC taxpayers write a check to Hollywood moguls, taking revenue out of the state’s economy that could be better used by hard working North Carolina families, struggling businesses and creative entrepreneurs.
- In addition to the 25% credit, recipients pay no corporate income tax on the money they get. Fewer folks paying taxes means the rest of us pay more.
- There is a net negative budgetary impact. NC gets just over 19 cents on each dollar spent. In other words, this is a losing deal for NC taxpayers.
- Eleven states do not offer film credits. North Carolina should be number 12. Over the past few years, Arizona, Idaho, Indiana, Iowa, Kansas, Missouri and Wisconsin have ended their incentive programs, or have de-funded the programs in upcoming budgets.
- How much? $30M in 2011, $77M in 2012, and another $84M in 2013. All to the film industry for a very poor investment return – 19 cents on the dollar. What else could that $191M been used for? Teacher pay? Return to taxpayer? Opportunity lost. Taxpayer money wasted.
- Jobs? NCGA says the film credit brought 55-70 in 2011; Federal Bureau of Labor Statistics says 792 in 2012. A thoroughly debunked report paid for by the film industry claims thousands of jobs have been created. Not so.
- NC’s credit sunsets on Jan 1, 2015. Dozens of tax carve-outs, exemptions and special treatments have been eliminated or sunset over the last three years. Backtracking on any of them negates the benefits of tax reform we are finally seeing with lower unemployment and job growth. Do not open the door to erosion of hard fought improvements to NC’s tax system.
Further tax reductions and putting more money in the economy leads to economic growth, not government giveaway programs to special interests. The film industry is not special. North Carolina taxpayers are. Let’s give them a break. Lawmakers should let the film credit sunset on Jan. 1, 2015. We need heroes.