The Campaign Spot

Election-driven news and views . . . by Jim Geraghty.

Palin, Explaining and Justifying the TV/Movie Production Tax Credit


Having kicked over a hornet’s nest in writing about the state tax credits awarded to “Sarah Palin’s Alaska” and hearing an earful from readers about my intellectual flaws and deformities, I was inclined to leave the issue be.

But, for what it’s worth, Palin offers a lengthy defense of the tax credit on her Facebook page, which can be found here. Those who find this issue significant should read her thoughts in full.

I would like to depart this brouhaha by noting the message of “government must get smaller, spend less, and do less” is obviously a hard one to sell to the public in most circumstances, or at least it’s easier to sell in the abstract than in the particular. I suspect a lot of non-conservatives think that the conservative vision of smaller government is actually so selective as to be meaningless; those darn rich Republicans want to cut spending on welfare, etc. (“balancing the budget on the backs of the poor”), but want to keep funding for their favorite programs. I think that we on the Right have a lot of skepticism and cynicism to overcome if we are to alter our current course of fiscal ruin.

To counter the skeptics, conservatives need to show that their preferred programs aren’t spared. When we see a defense program that doesn’t provide enough bang for the buck, we’ve got to cut it. We have to sniff out programs that amount to corporate welfare. We can’t keep agriculture subsidies at their current levels by invoking American Gothic and Ma and Pa Kent. We can’t tell Americans that they have to give up government money and programs that they like while we get to keep the ones we like.

Perhaps if I were in the film industry, I’d find these tax credits to be a terrific idea. But from the outside, they look like government liking television and movies more than other industries and giving it a tax break, not too different from the federal government deciding they like the Chevy Volt more than other cars and offering a generous tax credit to its buyers. Does Alaska’s film and television production tax credit help create jobs and promote the state? Sure. But the job creation and economic benefit numbers are hard to verify (as cited below) and perhaps Alaska alone has the budget circumstances to justify this. Maybe “Sarah Palin’s Alaska” really was the single-most cost-effective way to attract tourists to the state; I’m not an expert on the travel industry. (This Travel Weekly article indicates 2010 was better than 2009 for Alaska’s tourism industry, but doesn’t mention the TLC series at all.)

In short, tax credits for TV and movie productions strike me as comparable to tax credits or taxpayer support for sports stadiums and arenas — a frivolous luxury that doesn’t fit the vision of “limited government.” I know 45 states currently offer these incentives; their commonality doesn’t make them any better or wiser a policy choice. There were/are a lot of earmarks, too.

Palin’s in a unique spot in that she’s a supporter of these subsidies/tax credits and an indirect beneficiary of them; it is her unfortunate luck that the tax credit and her (reported but not verified) salary are in roughly the same seven-figure range. The traditional argument is that, “if we didn’t offer these incentives, the production company would just film the show elsewhere,” and in many cases that’s true. But I doubt even the most shameless producer would film “Sarah Palin’s Alaska” in California.

At some point (I expect and hope) Sarah Palin is going to go out before the American people as a presidential candidate and argue that government can and must do less and spend less. I just grind my teeth knowing that she’s now set up for the easy snickering response: “Yes, that way government can stick to its core duties, which is providing tax incentives to television programs.”

Tags: Sarah Palin


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