Tax Roundup, 7/30/2012: film budgets, semi-secret film trials, and who really benefits from targeted tax breaks

July 30th, 2012 by Joe Kristan

hh44.jpgIowa Supreme Court rules that film budget summaries for film tax credit recipients are public information.  The court ruled that the state must release the summaries, reversing a lower court decision that the information was confidential.

Oddly, one of the film companies fighting to keep the information confidential was Polynation Pictures, whose leader is serving a 10-year sentence for looting the program.

Technically the trial of film tax credit figure Chad Witter is also public information, but if you are looking for coverage in Iowa media, it might as well be top secret.  The trail enters its second week today. Whatever revelations are in the trial about the shadowy world of brokers and middlemen who market tax credits, local reporters don’t think they’re worth mentioning.

Meanwhile, Iowa taxpayers still are coughing up cash to Hollywood, reports thegazette.com:

Judgments paid by the state of Iowa spiked to nearly $13.2 million last fiscal year as attorneys negotiated settlements to resolve claims and disputes caused by employee mistakes, workplace misconduct or other damages involving government operations.

Nearly half of the payout approved by the State Appeal Board in fiscal 2012 involved pre-litigation settlements with film projects that sought state tax credits under an ill-fated state incentive program that was shut down in 2009 after an audit showed millions of dollars worth of tax credits were awarded improperly.

But I’m sure we got our money’s worth out of the deals because of all of the intangibles they filmmakers brought to Iowa… (via TheBeanwalker.com).   

Film credits don’t make any more sense in New York.  Andrew Cuomo: Subsidizer to the Stars. (Patrick Brennan)

That tells you who the tax credit programs are really for.  From CSMonitor.com:

Lee Schafer of the Minneapolis Star Tribune called me the other day to see if I had any information on the effectiveness of angel investment tax credits for a story he was writing.

I told him that all that the tax credit programs do is speed up or slow down investments (to take advantage of their timing).  There is no evidence that they increase angel investment whatsoever. They are not the job creator politicians claim when enacting these programs.  (See my arguments in my editorial at the WSJ).

In his investigation of the program in Minnesota he found strong support among politicians for the program, but very little support from entrepreneurs.

State tax incentive programs are usually a head fake, especially in high-tax states like Minnesota and Iowa.  The politicians use them to pretend they are “pro-business”  while leaving a business-unfriendly tax system in place.

Tax Policy Blog, Taxes and the Outsourcing of U.S. Jobs

Kay Bell, Cayman Islands to tax foreign workers

Paul Neiffer, S Corporation Tax Returns Generate A Lot of Income

Peter Reilly, First Circuit In Easement Donation Case – Don’t Confuse The South End With South Boston

Trish McIntire talks about when you can claim a married child as a dependent.

Robert D. Flach was Buzzing over the weekend.

TaxGrrrl, Olympians Get a Free Pass on Taxes at the London Games

Wheres’ the easy money in that? Speed cameras and automated road monitors everywhere, but the police still can’t catch a drunk driver (Via Gongol)

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