Movie Made in Israel Gets Michigan Tax Dollars

Michigan taxpayers will be providing corporate welfare to a production company outside the state for a film shot entirely in another country, according to an article on MLive.

The article reported that the documentary, “Original Bethlehem,” was awarded $65,270 in subsidies for $217,566 spent in Michigan. 

This illustrates one of the classic problems with the Michigan film incentive program, which awards subsidies up to 32 percent of what a company spends in the state. Film subsidy supporters always point to the benefit of money being spent in the state while ignoring the cost (the subsidy money was taken from taxpayers, who will now never get a chance to spend it). The latter point is why the Senate Fiscal Agency calculated 11 cents on the dollar return for the program.

As long as states provide subsidies, film producers will shop around for the highest amount of money they can get from a state — a classic case of economic “rent seeking.” Outside of California, the states with the most generous incentives typically land the most movies.

But centralized planners are extremely poor investors. The state should get out of this business once and for all.

(Correction: Portions of this story have been changed from its original posting. The film has no ties to Hollywood and it was not shopped around among states for post-production work.)