Gov. Roy Cooper's policies on corporate taxes and corporate welfare can seem confusing at first. In January, he continued his befuddling practice of approving millions of dollars to individual corporations while complaining about corporate tax cuts.
"Hollywood East" (NC) has been battling "Hollywood of the South" (Georgia) in film incentives since before 2009. And Georgia's been winning, according to film incentives' advocates in both states. But are they really?
Of the four possible combinations, we at the John Locke Foundation have always favored the Freedom & Growth combination of low corporate taxation with low corporate welfare. Gov. Roy Cooper's choice is the cardinal opposite.
The audit's accounting for the lost government use of the tax credits doesn't ask what economic activities would have occurred if the money was directed by individual taxpayers to whom it originally belonged. It assumes that their money is directed by government at no cost to the state economy.
The audit provides a much lower economic impact of Georgia's film tax credit than the Georgia Film, Music and Digital Entertainment Office does. But because of certain assumptions used in its model, the audit still manages to overestimate Georgia's film incentives' impact.
Public-choice problems are very difficult problems to overcome, even when there is broad agreement across political parties and society that they need to be fixed
In 2016 Georgia granted $667 million in tax credits for film productions. In return, Georgia realized only $65 million in net new revenue, meaning the state self-inflicted a net revenue loss of $602 million.
