Jailing them instead of bribing them. Iowa has drastically altered its approach to the film industry in the last few years. Where it once lured them with lavish film credits, meaning free cars and cash, it now merely provides lodging. From WHOtv.com:
The Iowa Court of Appeals has affirmed the sentencing of a Minnesota filmmaker who pleaded guilty to fraudulent practices.
Wendy Weiner Runge was sentenced to 10 years in prison after pleading guilty in connection with Iowa’s film tax credit scandal. She was the owner and operator of a film company that applied for tax credits from the Iowa Film Office in 2008.
Ms. Runge said the sentencing judge improperly considered her combative blog posts as evidence of lack of remorse. The appeals court held otherwise:
Similarly, here, the court properly considered Runge’s statements criticizing the court’s process and disparaging the prosecutors and the judge personally in considering her lack of remorse.
You don’t need to go to law school to figure out that if you plead guilty to something, it’s unwise to publicly rip the judge before sentencing.
Iowa spent over $30 million on the film industry via transferable film credits — another way of saying “subsidies.” A state auditor report said that 80% of the credits were improperly granted. It might have been cheaper to just imprison the filmmakers in the first place.
Link: Appeals court opinion.
From films to fertilizer. The Iowa corporate welfare machine now is focused on a less glamorous industry. On the heels of a huge tax credit grant to build a new fertilizer plant in Eastern Iowa, Iowa announced yesterday an award of up to $70 million of tax credits for a new Sioux City fertilizer plant for a different fertilizer company.
Between the two plants, the state has awarded up to around $180 million in tax credits. This compares to budgeted net receipts for Iowa’s corporate income tax of under $400 million.
The state claims the project will bring 2,000 construction jobs and 100 full-time jobs at the plant. If they max out their tax credits, that works out to about $33,300 per job, or $700,000 per “permanent” job. Heck of a deal. Meanwhile every other business has to cope with a horrendously complex state tax system with high rates to support these big credit grants.
The politicians love these press conferences when they can brag about bribing new jobs to the state. Too bad they don’t have to call press conferences every time the state’s dysfunctional tax system costs a job. But they wouldn’t have time for a press conference every day.
TaxProf, WSJ: Owners Race to Sell Their Businesses by Year-End to Avoid 67% Capital Gains Tax Increase. If you are going to sell anyway, I understand. If you don’t already have a buyer, though, it’s probably too late to beat the rush.
Brutal Assault on Reason Watch:
Going Concern, Grover Norquist: No Matter What, Taxes Aren’t Going Up
Howard Gleckman, A Disappointing Presidential Campaign Comes to an End (TaxVox).
Kay Bell, Making Obama, Romney tax plans add up
Jack Townsend, Relevant Conduct in Tax Cases
Robert D. Flach starts the weekend early with WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’ – SPECIAL FRIDAY EDITION
News you can use: 10 (er, 11) Uses For Leftover Halloween Candy (TaxGrrrl). I heartily endorse the first two suggestions.