Friday, December 3, 2021

ECONOMIST ROBERT REICH CALLS MOVIE TAX INCENTIVES “A ZERO SUM GAME”

November 20, 2013 by · Leave a Comment 

It is one thing for states to offer tax incentives as lures to major industrial companies; it is quite another to offer them to movie producers. That, in effect, is what economist Robert Reich, who served as secretary of labor in the Clinton administration, has suggested in an interview with Daily Variety. Calling the competition among states offering tax credits to filmmakers a “race to the bottom,” Reich said, “These tax credits and tax incentives are a zero sum game. … They don’t create a single new job. They just move jobs around, and they rob the states of the money they need for education and infrastructure.” In the past, he said, a state’s “most valuable resource” was the manufacturing plants “that can’t just one day get up and move.” Not so businesses like entertainment, finance or technology that depend on “brain power,” he said. “They can move in a minute.” Reich is currently promoting the documentary Inequality for All, which focuses on growing income disparity, in which he is featured. Variety observed that in one scene Viacom CEO Philippe Dauman is shown talking about having to make “difficult” workforce reductions. At the same time, Dauman’s compensation is displayed on screen: $84.5 million for 2010.