Should Public Tax Dollars Be Used To Fund The Movie Industry?

Get a conversation started about what public tax dollars should or shouldn’t be spent on, and you’ll get a LOT of people joining the conversation. This story that I read over at Yahoo News got me thinking about just that issue again. First… here’s the story in question:

Mexican directors Guillermo del Toro, Alejandro Gonzalez Inarritu and Alfonso Cuaron, fresh off a raft of awards season accolades, have met with Mexico’s new president to urge more support for the struggling national film industry. The so-called “three amigos” said on a Tuesday news program that they recently met with President Felipe Calderon in a bid to garner more backing for the industry. They added that they plan to meet with lawmakers Wednesday. The three filmmakers, who also produce movies, are pressuring the federal government to create better distribution and exhibition opportunities for local production companies. Of about 60 films produced here in 2006, only half hit theaters.

Ok, first let me say that I have NO PROBLEM with these guys looking to get support for their art and their business. They have the right to ask, and I think there’s nothing wrong with the asking. The question is… what should governments and societies do with those requests for public funds to assist a certain industry?

According to reports, the movie industry generated almost $30 Billion dollars at the international box office last year… and none of that takes DVD sales into account either. There is no denying that the movies are a BIG business. A-List actors making upwards of $20 million per movie (really stupid) so much glitter and glamour doesn’t really lend itself to being an industry with a poor man’s hat out to the government looking for a hand out does it?

On the one hand, take Canada for example. Canada has HUGE tax breaks and benefits for making movies here (one of the reasons so many Hollywood movies are produced up North of the Boarder these days). The benefit is that it increases Canada’s image on the international stage, it generates lots of jobs in the industry for people who live here, and those people pay taxes. There is no denying that there are some tangible benefits to the government helping out with the movie industry.

However, on the other hand… when our education system, health system and just over all financial status is precarious to say the least… is giving free money to a $30+ BILLION dollar industry really what tax payers dollars should be used for?

They want to shoot a Samuel L. Jackson movie up here? Great! What’s that? Jackson alone is getting $8 million, the movie will probably make $50 million at the box office… and they want ME to pay for it???? Are they going to share the profits by putting money back into the tax coffers? No? That doesn’t seem right, and a LOT of people have a problem with it.

This is one of those rare issues that I don’t really have a strong opinion on either way yet. I just thought it was an interesting question and I thought I’d throw it open to you guys to discuss. So what do you think?

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18 thoughts on “Should Public Tax Dollars Be Used To Fund The Movie Industry?

  1. I think if Los Amigos can get the government to help some independant filmakers to get started or even completed that would be great. Have a Mexican version of Project Green Light – (the matt damon ben affleck thingy). The government can use green light as an example of how to get these independants started.

  2. “On the one hand, take Canada for example. Canada has HUGE tax breaks and benefits for making movies here”

    I think something that frequently gets lost in this argument is that tax credits don’t cost taxpayers a dime. Not one red cent. It’s a tax CREDIT, not a bag of money.

    Consider a large municipality like Toronto; the Canadian federal government, the Ontario provincial government and the municipal Toronto government all offer tax incentives for Hollywood productions to shoot here. Toronto goes further and offers to arrange reduced hotel and vehicle rentals (I’m sure Vancouver and Montreal do similar things) and other reduced fees.

    None of these things cost anyone anything. They are a reduction of “the usual fees” to get productions to come here and spend a metric shitload of cash locally. That production cash goes to industry services (equipment rentals, film houses, local background actors, restaurants, etc.), the usual local taxes and permit fees (less the incentives of course), the local technical unions (and the income taxes paid on those wages), craft services, location fees, etc., etc.

    The end result is that a huge amount of money gets injected into the local economy, and any tax credits that were originally offered are more than made up for.

    Someone once told me that before cameras actually start rolling a movie is just a story in a stack of paper and a big bag of money, and both are highly portable. The purpose of government tax incentives for production companies is not to help the film industry as a whole, but to help local film industries and local economies. But again, I have to beat this point home: incentives don’t cost taxpayers a dime.

    Without the offered incentives production companies will simply go and spent their $200M somewhere else, like Romania. The “local” economy certainly doesn’t benefit from that, wherever you are (unless you’re in Romania ;).

  3. “Tax money should be used for more usefull things??? Like investing is culture is not usefull…? Tell you what, it is certainly more usefull that to wage war against another country.”

    I’d rather see the money used to fight for the freedom to make the films people want without fear of beheading.

    If the NEA is any indication of what government funding does for our “culture” – funding masterpieces such as Piss Christ or the Whitney Museum’s perverted Santa’s workshop – then I’d rather see the money burned as fuel.

    If the government feels the need to step in, it should consider tax breaks for wealthy benefactors.

  4. BTW Britain got tough on movie companies, repealing the Inland Revenue Service’s foreign rebate credits and movie’s got the hell out of the UK overnight. Johnny Depp’s The Libertine, very nearly didn’t get made since it went into prodcution just after the changes took effect.

    I guess the only answer to the question of whether tax payers should take up the slack for tax policy geared toward Hollywood is to ask, “Does you state NEED movies to be made there because you have no other economic vehicles to speak of?” (see Louisiana)

    If the answer is yes, then it’s good policy, if not, then it isn’t.

  5. I live in Louisiana where we’ve seen a BOOM in movie-making the last few years. Speaking of Samuel Jackson, he just got through finishing The Cleaner in my hometown, and even gave us some love on Letterman the other night.
    Louisiana has a 25-percent tax-rebate program and New Mexico’s is even more aggressive.
    I LOVE having movies shoting here since it helps local lawmakers think og ways to start a homegrown movie/TV idustry, like what Rodriguez and Linklater have done in Auston, Tx.
    And it’s not really like the taxpayers are PAYING for it. It’s just money that it’s 25-percent the state doesn’t collect. I think it’s a model for state tax policy and should be enocuraged on ALL statewide tax-fronts.

  6. That is a bit of a silly question, cause the majority of people paying taxes and not working in the movie business as director or writer (I am not even talking about technicians) will probably answer ‘NO’. The thing is, do we want a commercial filmindustry to be the only voice in the future of cinema? Studiopics don’t need taxes and don’t use ’em. A lot of independent first time directors will need them to pay for instance first time actors and first time camera operators,… It should be intelligently spent, but I am all for it, sure.

    Tax money should be used for more usefull things??? Like investing is culture is not usefull…? Tell you what, it is certainly more usefull that to wage war against another country.

  7. Denmark has the perfect system. Free health care, free education (on ALL levels), free roads AND the government funds the arts. Music, movies, television all alike.

    We pay 35-60% taxes. More 60 than 35.

  8. Can of worms, John. You spilled this one. For one thing, you’re asking too general a question. There’s no doubt that the US, Canada, Mexico, and International film situations are all very different. By generalizing all, a person cannot form one single opinion. If you ask a more specific question, like: “Should Canadian tax dollars support the film industry?” or “Would Canada lose out on filming opportunities if the government rescinds tax advantages to American companies?” we could then debate that argument and answer it. But I highly doubt anyone that comes here knows enough about the US, Mexican, and Canadian situations as a whole to speak about them.

    As for Canadian tax dollars being spent on funding the industry, I think that is wrong. I believe giving non-profit production companies money to create and inform is one thing, but giving a billion dollar profit company money to fund a film is insane, unless it’s done as a loan and they pay it back whether or not the film makes money. Tax breaks on buying/leasing property to shoot the film is OK, as it will generate interest within Canada. I don’t have a problem with that.

    As an example, in London we have The Grand Theater, where every year they do the budget and our city council allocates $500 000+ to it. I think this is a crock of sh*t! For starters, most tickets sell for $30 a piece to watch a production at the Grand, the bloody thing hasn’t turned a profit in decades, and it doesn’t really promote tourism or generate revenue for the city or the industries in it. All it does is suck the lifeblood out of London. Every year our taxes keep going up, yet less people attend the Grand. With government officials throwing money away on crap that continually loses money, it’s no wonder our education and health care establishments are becoming second rate. That’s the problem with free money – you don’t respect it when you can just take it. That argument holds true with the movie industry: If we just give them money, there’s no appreciation for it. If we loan it to them, we will at least get some, if not all, of it back.

    The movie industry and the Grand Theater situations don’t really differ except on one thing – the movie industry increases spending in the area. It employs several people that eat, drink, drive, sleep, and shop within the community where they’re shooting the film, for more than a night. If they’re shooting on set for a week, the local economy thrives. Not that many people want to see “Puppetry of the Penis” more than once (once was too much).

  9. Never. The US government should stop funding public television and radio as well. The dollar spent is a dollar taken from something more important.

  10. I don’t know. If a movie company asks for government help in terms of money, the goverment WILL want something in return (speaking of US gov’t, not Canada). If I had a movie company I would be very leery asking for help from the government.

    Movie Company: “We would like funding for a upcoming project. George Clooney has already agreed to do the project. Will you help us out?”

    US Gov’t: “Really? How about Mr. Clooney speaking at a Republican dinner backing the President’s war in Iraq. If he agrees to endorse President Bush, we’ll give you the money.”

    I know this is tongue in cheek, but you see where I am going.

  11. I like the idea of tax dollars going to fund up & coming filmakers. I think the NFB here in Canada seems to do a very good job of that. They don’t give out millions upon millions to one project, but help fund small films (and sometimes bigger Canadian films which are still tiny compared to American budgets) for emerging film-makers and with that push, help these film-makers hopefully get their foot in the door with the studios.

    Even though I’ve heard some problems exist in regards to nepotism & a certain ‘clique-ness’ involved with the decision making process, in principle it’s an admirable idea, and generally speaking, it does work.

    This type of funding is a great starting off point for any aspiring film-maker. But no film-maker should expect to make a career out of this type of funding for the rest of their lives. Again, it’s a starting off point.

    There’s a point to be made regarding tax-breaks given to American productions, in that certainly that money could be used elsewhere within the system.

    But if we stop this tax-break system, this could mean that all of these ‘runaway’ productions go elsewhere, and then we get no money whatsover. You can’t deny the fact that entire industries have been created, where there were none, especially in Vancouver & Toronto.

    Many businesses though, open up in whatever area because of tax-incentives given to them by city & provincial governments. The film industry isn’t the first one to take advantage of being ‘wooed’ by local gov’ts. You can bet that any factory or huge business is given plenty of incentives to build in a certain area because of local tax-breaks.

    The film industry offer the same benefits as any other business does; jobs, jobs, jobs…

    City gov’ts are very aggresive in getting businesses of any kind to set base in their area. They offer up plenty of incentives in order to create jobs. It’s a safe bet that if a new production office, or factory, or headquarters opens up near you, it’s because that area gave the company the best deal possible especially in regards to property taxes.
    That company will probably have had 3 to 5 areas in mind, and then just ‘shopped around’ for the best deal they could find.

    I can understand both pros & cons of helping fund the industry, but I think that I am more ‘for it’ than ‘against it’, becuase I believe there is great benefit in helping bring jobs to an area which otherwise would not have had them.

    Here’s a question worth pondering John;
    Would Battlestar Galactica be the show it is today (or would it have even existed), if it wasn’t shot in Vancouver?

  12. I have a problem with this in a few respects…
    1-Funding the movie industry does what for the taxpayers??? They fund the movie that made it to theatres, they PAY for the ticket to watch the movie, they PAY to rent the movie if they didn’t see it in theatres, they PAY to buy the movie…what’s next???? Do we start funding their elaborate clothing needs?
    2-Mexico doesn’t have the money to fund the movies…if they did, don’t you think they’d find a better use for it in healthcare?
    3-If Mexico does have this money….why the FUCK isn’t it going to better places and how could they possibly justify asking for help from other countries for anything after they made such a self implistic decision?
    4-The three Amigos….make a fair bit a coin wouldn’t you say? So why don’t they form a funding organization for film makers? That would be far more politically correct and far less self motivated looking to the general public.
    An organization has it’s tax benefits, fundraising for the cause etc that could be easier to implement than what they are proposing…’oh please Mr President….provide us wealthy filmakers a grant or 10 while a majority of the population is poorer than dirt’
    And they wonder why Mexicans come accross the boarders to support their families….

  13. The problem with the Mexico example is this, gain what? So what there’s talent there? Who does taking people’s tax dollars away from them to make a hand full of guys famous internationally help they poor guy who is having his tax dollars taken?

    Ok, so there are 3 rich Mexicans. Is that really what their tax dollars should be spent on?

  14. I think it’s safe to say there are certain markets that have been able to establish themselves without the need of government financing USA, UK, France, Italy, Spain, Canada.

    But there are definately markets that need assistance getting off the ground so that they can partake in this money generating industry. Even something small like the quota system similar to what South Korea had. I think Mexico definately needs some asistance getting off the ground, because there is so much talent and promise imerging from that country, the only thing they are missing is the money.

    Spend a little get a lot.


  15. No, the public tax dollars should not be used to fund the movie industry. They make Billion’s a year. That Billion should be funded towards all kinds of film making. Let the movie industry help itself. To me this is the movie industry reaching out into peoples pockets some more. We pay enough for tickets, we pay enough for the DVD’s, why should we fork over some more money when our taxes can go on other things that need money.

    Should film makers try get more support? Of course. But avoid digging futher into the public’s pockets. $30 Billion is enough to keep the industry going. I want to start filming my film project in the summer and if my funds came from peoples taxes, I’d feel a little bit shitty about it. Oh look and so and so working hard to earn a living and what are they’re earned money going on? Some film that might end up being shit.

    Let the film industry handle themselves when it comes to money, they have plenty of it. But I do think they should get support from they’re own media. Let the movie industry back up film makers. Let the movie industry belive in the directors.

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