Hollywood Welfare

While politicians are busy making up euphemisms for corporate welfare, journalists are busy covering for them.

Joanne Kelley wrote an article for the January 30 Rocky Mountain News titled, “$10 million bill aims to lure Hollywood to Colorado.” Kelley describes a “$10 million cash rebate program” that “would boost the fledgling incentive budget from its current $600,000 a year in an attempt to help the state compete with others that have attracted far more Hollywood film productions after spending heavily on enticements.” Not surprisingly, a Republican, Representative Tom Massey, co-sponsored the bill. Because Republicans love welfare, even if it’s for Hollywood.

Kelley continues, “Producers with motion picture budgets of at least $250,000 would be able to collect a cash rebate of up to 15 percent of the money they spend while shooting a movie in Colorado.”

Let’s stop right there. This is not a “rebate.” It is a forced wealth transfer, a subsidy. It is corporate welfare. The top definition of “rebate” from Dictionary.com, based on Random House, is “a return of part of the original payment for some service or merchandise; partial refund.” For example, if you buy a computer from a store, and then the computer’s manufacturer sends you a check for a fraction of the original payment, that’s a rebate.

That’s not what we’re talking about here. We’re talking about Colorado politicians forcibly taking money from some people in Colorado in order to give the money to other people who probably aren’t even from Colorado. They’re probably from California. So, basically, the proposal would forcibly transfer wealth from Coloradans to Californians — and, indirectly, to some other Coloradans. (Does anyone wish to check which Colorado lobbyists support the bill?) To return to the computer example, it would be as though you purchased a computer from Joe, and then Fred forced Judy to pay you some money. Such a practice may accurately be described as a lot of things, but “rebate” is not among them.

The Hollywood welfare scheme is a bad idea for at least three reasons. Before turning to the fundamental moral argument, I’ll deal with the two economic points.

Kelley writes:

Proponents of boosting the rebate fund to $10 million point to the recent 12-day shoot of the Paramount Pictures film NowhereLand, starring Eddie Murphy. In that short time, the production spent $3.25 million here, booking rooms at the Brown Palace and hiring 12,000 extras and 65 crew members.

“If we had better incentives, they probably would have shot more of the movie here,” said Rep. Cheri Jahn, D- Wheat Ridge, a co-sponsor of the legislation.

As Jayne might say, I’m smelling a lot of “if” coming off of this plan. The fact is, we’ll never know whether somebody filmed a movie here specifically to get the welfare transfer, or whether they planned to film the movie here anyway, and then decided to cash in on the Hollywood welfare. However, we can be assured that politicians will point to all of the spending of all of the movies that get a subsidy and pretend that the inflated figure is somehow relevant.

Kelley points out that New Mexico also offers Hollywood welfare. This points to the second problem with the Colorado scheme. If Colorado increases its Hollywood welfare, this will only encourage other regions to increase theirs as well. Long term, this is a great deal for Hollywood but a lousy deal for the suckers paying the subsidies.

However, the moral point is more important. It is wrong to force Coloradans to subsidize movies against their wishes. People have the right to control their own income. Moreover, Hollywood welfare is a violation of free speech. The right of free speech entails the right not to speak and not to financially support the propagation of ideas that one finds offensive. Movies, by their nature, deal with ideas. Inevitably, a subsidy will go to a movie that at least some Coloradans find objectionable. A peripheral implication is that Hollywood welfare forces Coloradans of poor and average financial means to subsidize quite wealthy people, such as Eddie Murphy and Hollywood producers. If we take seriously a recent article from The Denver Post, Colorado’s taxes are already regressive. Forcing Colorado’s poor to subsidize wealthy Hollywood movie makers (or even wealthy Colorado hotel owners) would add insult to injury.

Hollywood welfare violates the rights of Coloradans and is therefore morally wrong.