The corporate welfare myth | Arkansas Blog

Thursday, January 14, 2010

The corporate welfare myth

Posted By on Thu, Jan 14, 2010 at 8:58 AM

Don't bother telling your friends at the chamber of commerce about this. After their desire for taxpayer subsidies for their unaccountable cheerleading activities, the good suits believe in nothing more dearly than the value of corporate welfare. Hourly wage earners should succeed by sweat of their brow. Corporations need taxpayer subsidies in their ideal "free enterprise" system.

End of rant.

The news is a study on a specific sector of the corporate giveaway game -- taxpayer subsidies for movie production. We play that game in Arkansas. A new report from the Tax Foundation says they don't work.

Based on fanciful estimates of economic activity and tax revenue, states are investing in movie production projects with small returns and taking unnecessary risks with taxpayer dollars. In return, they attract mostly temporary jobs that are often transplanted from other states. States claim to boost job training with MPIs, but these tax incentives often encourage individuals to gain skills that are only employable as long as politicians enact ever larger subsidies for the film industry. Furthermore, the competition among states transfers a large portion of potential gains to the movie industry, not to local businesses or state coffers. It is unlikely that movie production incentives generate wealth in the long run. Most fail even in the short run. Yet they remain popular.

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