The “shared sacrifice” scam

By Joel Thurtell

Frankly, I don’t give a damn whether another movie is made in Michigan.

If the nascent Michigan film industry folds up and moves because the state no longer singles this high-profile business class out for lucrative tax incentives, I wish them a good life.

Sorry, Jeff Daniels: Don’t let the door hit your ass.

Gov. Rick Snyder was right when he remarked that tax abatements to film-makers are a gift from the state — a subsidy, really, that must be made up with taxes on other businesses and individuals.

I’ve always been skeptical of tax abatements. The problem is that while the abatement, i.e., tax break,  is in effect, governments that depend on taxes to provided services are short-changed. And once the abatement goes away and the business has to pay taxes, it’s free to pull up stakes and find a more tax-friendly venue.

Besides the state government, the list of local governments, schools and authorities that depend on taxes is long: your city or township for starters, followed by local school districts, community colleges, libraries, parks programs in some cases (think Huron-Clinton MetroParks Authority) all receive funds from local taxes. When you give those “abatements” to film-makers or factories or, yes, even newspapers, you are reducing the overall level of revenue that supports government agencies we depend on.

I’ve never been impressed with the role of so-called tax increment financing schemes and the myriad Downtown Development Authorities, either. When I see those fancy brick sidewalks and cute antique-looking street lamps, I wonder how much less our local schools got thanks to the bleed-off to the DDA.

So I’m with the governor when he points out that giving tax credits to film companies is not a free gift. The money comes out of state revenues.

But here’s where I have a problem: The governor speaks of “shared sacrifice.”

His logic doesn’t hold if he takes tax cuts from one group and gives them to another.

How can it be “shared sacrifice” if he’s handing $1.8 billion of tax cuts to businesses while adding to the tax burden of everyone else?

He refutes his own argument against the film industry tax credit when he takes from one and gives to another.

This is a logical conundrum the governor and his Republican party need to address.

Now.

If they don’t, the issue will come back to haunt them.

Drop me a line at joelthurtell(at)gmail.com