State Representative Justin Amash Accused of Not Compromising on Film Tax Credit
State Representative, and RLCMI advisor, Justin Amash has recently been accused by critics of “not compromising” on the Michigan Film Tax Credits. During a rally at the State Capitol earlier this week, Deb Havens, chair of the West Michigan Film Video Alliance, accused Amash of being just another politician who plays “off on their own agendas, rather than what is best for the state and the people of Michigan.” Ms. Havens seems convinced that Amash’s ideology has nothing to do with sincerely held beliefs, and she also seems convinced that she, and not Representative Amash, knows what is best for the people of Michigan. The irony is that Havens explains Amash’s argument quite clearly stating he is “committed to no incentives…the idea being that if we get rid of all incentive programs then we can get rid of the Michigan business tax, and we won’t have to tax our businesses to pay incentives, therefore, get rid of all incentives.”
People like movies. They make us laugh, cry, and scream. But is the film industry any more important than other sectors of economy such as manufacturing, which is comprised of companies who have been here much longer, and who are the ones paying to attract to newer, out-of-state industries. No one is holding a rally at the capitol on behalf of the garbage industry, even though importing waste from other states and Canada has been a growing business in Michigan in recent years. It must not be as sexy as the movie industry whose growth clearly furthers Ms. Havens personal agenda as Chair of the Michigan Film Video Alliance (read “special interest” group).
And this issue also touches upon another big problem in Michigan politics, that being economic populism. For example, Michigan State Senator Nancy Cassis has been one of the most conservative voices in legislature over the last decade. And while she has rightfully questioned whether the film incentives are actually working, her proposed solution “that 90 percent of the people working on a movie or national ad production must be from Michigan” is also faulty. A parochial restriction that dicates to business that they must hire locally is likely to discourage them from locating in Michigan in the first place. However, this is the price that the private sector should not at all be surprised of paying when they receive government handouts (see the earlier post “Be Careful What You For” concerning the American auto bailouts).
Nor is Cassis’ argument that we should simply “right-size” the film credits by reducing the refundable amount of production costs from 40 percent to 42 percent, down to 35 percent all that convincing since, according the Anderson Economic Group, “the nominal tax expenditure is, at best, a rough guess, and probably an overestimate of the actual ‘cost’ of the program.”