Posted on 08/09/2006 10:11:01 AM PDT by GoldwaterFellow
Incentives for motion picture production shows Arizona's high sales tax rate
A few weeks ago, officials shut down Loop 202 in Mesa to film a crash scene for the upcoming movie, The Kingdom. The flaming cars were the first tangible results of Arizona's new motion picture tax incentive program which took effect this spring.
Qualifying film production companies are eligible for a corporate income tax credit equal to 10-20 percent of in-state production costs. They are also 100 percent exempt from state and county sales taxes.
These tax incentives underscore how much regular Arizonans pay in sales tax: $877 per capita, the tenth highest amount in the nation. Arizona vaults to number five when excluding states without income taxes, which tend to depend more on sales taxes.
Tax credit schemes implicitly acknowledge high tax burdens. If this weren't the case, why would they have to be lowered to attract Hollywood?
The Kingdom's producer recently said "[The] motion picture tax incentive is the reason our production came to Arizona." Great. But why not lower taxes and provide this type of incentive to all industries?
A better policy would be to eliminate the corporate income tax. That way all businesses contributing to Arizona's growth would benefit, not just movie moguls.
Noah Clarke is an economist with the Goldwater Institute Center for Economic Prosperity.
"A better policy would be to eliminate the corporate income tax."
It certainly would be - and it would be even better to do so on a nationwide basis by implementing the FairTax which eliminates this sort of income tax political manipulation and forcing some taxpayers to pay for this sort of limited direct benefit.
It's time for the FairTax!!!
Fair Tax ping!
Someone needs to tell Noah Clarke.
Maybe he's lurking!!!
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