|Hire us and your windows won't get broken.
Film welfare program forces legitimate businesses to pay for the rip off (by Ken Braun): The Michigan House of Representatives voted to kill Michigan's film subsidy earlier this month. The state's corporate welfare for filmmakers program was launched by Gov. Granholm in 2008 and then trimmed back by Gov. Snyder shortly after he was elected.
In a 2010 analysis of the original program, the Michigan Senate Fiscal Agency noted that "significant confusion appears to exist" regarding the program's costs and benefits. That confusion has kept the taxpayer ripoff alive.
Gaetano "Tommy" Lucchese was the sort of businessman who wouldn't have been confused at all.
At the age of 18, Tommy employed several associates to help him operate a successful New York City window washing company catering to small entrepreneurs with large storefront windows. His sales pitch to the mom and pop shops was simple: Hire us and your windows won't get broken. Not by any coincidence whatsoever, this enterprise would become the Lucchese crime family.
It's easier to denounce the broken window business plan when it's linked to a violent gangster. But the morality becomes fuzzy when the friendlier faces of filmmakers are busting businesses.
Tommy created jobs that wouldn't have otherwise existed by taking cash from hard working small businesses and giving it to his gang. The enriched hoods then spent the wealth in clubs, and on fancy restaurants, hotels and elsewhere, creating what some might today refer to as a "multiplier" effect for the economy.
But to believe Tommy was a job creator in any ethical or economic sense is to confuse him with his tax-paying victims. Just as the window washing conferred no benefit on the mom and pop shops, film subsidies are an economic loser for the real business people forced to pay for them.
The film subsidy represents "lost revenue," according to the SFA report, and it does not "generate sufficient private sector activity" to offset that cost. The report projected $262.5 million would need to be drained from Michigan Business Tax coffers to fund the film subsidies for fiscal years 2009-2011, but that this would produce just $159 million in net improvement for the state economy.
If a Michigan businesses resisted this rip-off and refused to pay, then the state would have used force to collect the money. Without tax collectors on his side Tommy had to enforce his "taxes" and collect the cash in person. On the flimsy distinction of a tax law codifying the rip-off hangs the blurry morality some use to justify the film subsidies.
A story reporting on the "Batman v. Superman: Dawn of Justice" film project wrapping up in October noted fans "don't have much time left to capture selfies with actors like Ben Affleck (Batman) and Henry Cavill (Superman)."
That one film hit the taxpayers for $35 million. As noted earlier in this space, that's the equivalent of taking the total income taxes paid by 21,000 average Michigan workers and yet having their government give them nothing in return but those photo ops.
The film welfare scam remains politically popular because it causes those famous pretty people to come to Michigan. If we were more honest about the program, we'd have sent the media along as we made the crime fighting duo go door to door to every Michigan business and personally demand the $35 million they took from us.
"Hello small entrepreneur: I'm here to take a lot of your money and give it to my movie rather than your schools and roads, but would you like a selfie with Batman?"
That dose of reality might have induced more of us to at least demand they touch up the windows.
The author, Ken Braun was a legislative aide for a Republican lawmaker in the Michigan House and worked for the Mackinac Center for Public Policy. He has assisted in a start-up effort to encourage employers to provide economic education to employees, and is currently the director of policy for InformationStation.org.