Just a Couple of Supply-Siders
Progressive liberal Democrat Alec Baldwin sent many heads spinning all over the blogosphere when he recently said this:
I’m telling you right now,” the actor warned, “if these tax breaks are not reinstated into the budget, film production in this town is going to collapse, and television production is going to collapse, and it’s all going to go to California.
Now the rich absurdity of a statement like that coming out of the mouth of Alec Baldwin has been chronicled many places all over the web (most notably in the Wall St. Journal), and the fascinating “why?” of it all is still being sorted out. Has he had an economic spiritual awakening? Has he gone insane? Or is he simply a narcissistic hypocrite who only wants tax breaks for the industry that pays him exorbitant amounts of money for saying words other people write during the two or three grueling, catered days a week that he actually has to go to work?
Whatever the answer is, there is one thing in Mr. Baldwin’s otherwise shockingly accurate statement that is utterly wrong. I can ease his mind totally about one thing: when his beloved 30 Rock flees New York because of the removal of the tax incentives that brought it there, the one place it will not be heading for is California.
Just as Alec has said will happen in New York, the film business is fleeing California’s punitive taxation for states that are cutting taxes to attract the huge revenues that full-blown film productions generate. As reported in the LA Daily News, the number of production days for feature films shot in California hit a record low of 7,043 in 2008, according to Film L.A., while the Michigan Film Office approved incentives for 73 film productions in 2008, up from three in 2007. Michigan’s Gov. Granholm has offered cash refunds from the state of Michigan of up to 40%, the highest incentive in the country, for film and TV productions that spend more than $50,000. If all the films that applied for incentives in Michigan actually get made there, they are expected to generate $436 million in revenues to the state’s struggling economy.
New Mexico, Louisiana, New York and Georgia have similar tax incentives and all have seen massive increases in film production in their states. So Alec seems to be on to something here: when you tax a product or business, you actually DISCOURAGE IT FROM OCCURRING! Incredible! And when the business doesn’t happen, nobody gets a job! Amazing! The business moves to other states where people are employed, paid money, and then taxed, with more revenue accruing to the state coffers! Breathtaking!
So with this unforeseen burst of wisdom emanating from one of Hollywood’s biggest stars, what will the state of California do to keep its most unique and profitable industry working within its borders?
Nothing.
From Jack Kyser, chief economist at the Los Angeles County Economic Development Corp.:
The rubric in Sacramento is, “Oh, we can’t do these incentives. It’s just welfare for the big corporations.” But they don’t understand how the industry works. Why are other states offering these incentives? It’s because it creates jobs and tax revenues. This is the message they have been trying to get through to the people in Sacramento – “It’s not going to cost you more money. It’s going to bring money to you.”
This is why the State of California cannot and will not ever work as long as one party –one ideology, I should say, since the supposedly “Republican” Governator doesn’t get it either — dominates every branch of state government. It is an endless and unstoppable cycle: the State raises taxes because they have a shortfall. Businesses leave the state to avoid the taxes. Individuals leave the state because there is no work because the businesses left. The tax base shrinks. The tax raises do not create the expected revenues because of the flight of individuals and businesses. Another shortfall is created. The legislature votes to raise taxes again. More businesses leave. Lather, rinse, repeat.
So the big “WHY?” rears its head again. Why can’t the state legislature of California have the same epiphany that Alec Baldwin has apparently had? The liberals and progressives that run California seem to understand this when they tax cigarettes to discourage smoking, and tax gasoline to discourage driving. They are keen on discouraging Big Tobacco, and Big Oil, and Big Pharma. So why don’t they use the same principle to ENCOURAGE Big Hollywood? Like Alec Baldwin, are they stupid (unable to understand it), insane (incapable of grasping reality), or just mendacious (willingly degrading prosperity for the sake of increasing their own power)?
Sad to say, I think it is the latter. Alec Baldwin, unlike his fellow liberal/progressive comrades in government, needs to get a paycheck from a business enterprise. Liberal politicians do not. And the more businesses they run out of their states, the more crises they create, the more misery they spread around, the more they increase and deepen their power base because they make themselves, the almighty State, the source for all sustenance. And the more secure their unlimited term in office becomes.
The bottom line is a bold statement that I have made on numerous occasions among friends, resulting in some scoffs and protestations (and many fist bumps), but absolutely no substantive refutations:
Liberal/Progressive Democrats cannot stand it when anyone makes money (except for them). It is unfair, they have done it on the backs of the poor, they are benefiting unfairly (except for them).
And Alec Baldwin has had his moment of clarity because the state of New York might decide not to say “Except for them.”
The only hope that any of us have is that enough people who actually have to work for someone else for a living, like even the great Alec Baldwin, will realize this and vote the liberal/progressive/Democrats out before there are no New Mexicos, Michigans, New Yorks, or Georgias left to flee to in order to do business without punitive tax rates.
The Change Alec Baldwin believed in and voted for is coming, and it is coming for his mailing address. But it won’t Change to Beverly Hills, Alec. You won’t be hanging out with your Left Coast buddies. It will Change to Detroit, New Orleans, Valdosta, or Albuquerque.
Because California, apparently, doesn’t want the business back.