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The Blockbuster Scam: A Surprising Way You're Getting Ripped-Off By Hollywood

State film subsidies are giving away desperately needed funds to well-heeled movie moguls.

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Like many subsidies, those for film and television not only wind up lining the pockets of the already well-to-do, but also end up paying for activity for which they were not intended. Case in point, New Jersey lawmakers belatedly found out that that they were subsidizing the production of MTV’s "Jersey Shore," much to the chagrin of Gov. Chris Christie (R). (The state later canceled that particular subsidy.) Other times, the subsidies will go toward projects that would have happened in a particular state anyway, providing a convenient windfall rather than an enticement for production to move.

Even the film industry’s lobbying arm, the Motion Picture Association of America, can’t find any hard data to support its contention that film subsidies help a state succeed economically. In fact, a recent report by the MPAA in defense of film subsidies cited only a hypothetical $10 million production,  not a real film, as evidence that subsidies work.

Fortunately, some states, such as Arizona and Kansas, have ended their subsidy programs, bringing the number of states spending tax dollars on film and television production this year down to 35, according to the conservative Tax Foundation. But other states are doubling down, betting more on the film industry with the economy still struggling in the wake of the Great Recession. That may be a way for Hollywood to get ahead, but it’s doing precious little for those taxpayers who are ultimately providing the dollars.


Pat Garofalo is economic policy editor for His writing has also appeared in the Nation, the Atlantic, U.S. News & World Report, and other publications. Follow him on Twitter at @Pat_Garofalo.

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