A news service for the people of Michigan from the Mackinac Center for Public Policy

Transformers

The third live-action "Transformers" movie hit theaters this week and is sure to have a decent opening. Regardless of whether any Michigan resident chooses to watch it or not, as a taxpayer, they’ve already been forced to support it. That’s why Michigan residents should ask for a discount when purchasing their tickets.

Michigan offers qualified and approved film productions refundable tax credits based on how much they spend in the state to make the movie. Since the tax credit is refundable and has little to do with the company’s tax liability, it is effectively a subsidy check from the state treasury. According to the Michigan Film Office press release, "Transformers" received $6.1 million in refundable tax credits from the state.

While this is a simplistic analysis, counting each person’s share can be done just by dividing the total credit by the number of Michigan individual income tax returns. The state treasurer reports that there were 4.5 million individual income tax returns, making each taxpayer’s share $1.36.

It’s certainly not the theater’s fault that the production company receives an incentive, or even the film producer’s fault for taking advantage of credits authorized by state law. This policy is nonetheless unfair to taxpayers whose own expenses are not looked upon so favorably by Lansing. Asking for a $1.36 discount at the ticket counter ought to be the least Michigan movie watchers should do. Another option is to make it clear to state legislators that the Michigan Film Incentive should be eliminated.

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See also:

Michigan Capitol Confidential Coverage of the Michigan Film Incentive Program

State Subsidies for Hollywood Dying in Iowa and Drawing Fire In Missouri and Michigan

Hollywood Battles Michigan's New Budget Chief

Cost to Replace Lost Jobs with Michigan Film Subsidies: $39.4 Billion

Firefighters or Mitch Albom's Movie Subsidy?

Meet James Hohman, Assistant Director of Fiscal Policy at the Mackinac Center. James discusses his latest project, an analysis of Proposal 1, the proposal on personal property tax reform that will appear on the August 5th ballot. Read more about Proposal 1 here: http://www.mackinac.org/20246


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