Fil tax credits a raw deal for Missourians

Last fall, when Gone Girl began production, Cape Girardeau descended into a star-struck madness. All talk focused around the movie and the stars; Facebook and Instagram became flooded with celebrity sightings. I don't blame locals for their enthusiasm of hosting a movie star like Ben Affleck and being the center of a major film production, but I do think it is more than a little ridiculous that Missouri taxpayers will be stuck with a $2.36 million tax bill to pay for this fleeting moment in the presence of Hollywood stars.

Taking advantage of the Department of Economic Development's (DED) Film Tax Credit program before it expired in November 2013, the producers of Gone Girl received $2.36 million in tax credits from the state to offset the cost of production and taxes on income and payroll. Tax credits are dollar-for-dollar reductions in a tax filer's tax liability, meaning that every dollar of "credit" given by the state for projects like Gone Girl ultimately results in a dollar less in revenue to the state, which could pay for schools and other taxpayer needs.

Don't be fooled by reports that these credits pay for themselves. The truth about film tax credits is that they bleed taxpayers to subsidize an industry that last year brought in $36 billion in revenue worldwide.

Take, for example, the $3,262 in DirectTV charges for the installation of satellite TV in the hotel rooms of Affleck, director David Fincher, and other highly paid Hollywood producers. Or try the subsidization of a movie star's hotel room. Then there is the $70 massage Rosamund Pike received courtesy of taxpayer dollars. And, my personal favorite, $650 for an espresso maker for the cast and crew. Agreeing to these tax credits means taxpayers end up paying for outlandish expenditures that benefit Hollywood rather than Missourians.

Despite the ridiculous expenditures subsidized with taxpayer dollars, tax credits still don't meet the basic tenets of their purpose. Take the promise of job creation for example. At the price of $2.36 million, each of the 116 Missourians hired for the production of Gone Girl should have a job that pays $20,344 for an entire year. Looking at the payroll of the production, none of these reported job positions were full-time or high-paying, and not a single Missourian is still employed in the same capacity. Furthermore, a closer look at their payroll reveals that many of the "jobs" created by the film went to out-of-state employees, businesses, and contractors -- not Missourians.

Why doesn't this tax credit work? Because Missouri does not have the proper infrastructure to support film production. Missouri has to compete with the 40 other states that have similar programs, but with much higher tax incentives. When faced with competition from states like New York and Louisiana who have hundreds of millions of dollars in film tax credits, Missouri can't afford to compete in this race to the bottom.

Having lived in Southeast Missouri for the majority of my life, I can understand the thrill that the production of Gone Girl brought to the area. But the ugly truth is that these film tax credits don't provide the jobs and economic growth that Cape Girardeau and Missouri need. Let's leave Hollywood in California so that Missourians don't have to finance celebrities' espressos or massages and focus on attracting businesses and investors to Missouri that won't leave taxpayers to foot the bill.

Jessica Stearns is an intern at the Show-Me Institute.