Crony Capitalism – California Style
It’s good to be in with the “in” crowd, especially when the “in” crowd is made up of Sacramento politicians capable of doling out millions of dollars in tax credits.
Those currently in with the “in” crowd include any industry or company that can somehow attach “green” to their credentials. This helps explain why the state just provided the successful Tesla electric car company a $35 million tax subsidy. Yes, contrary to Kermit the Frog’s song “It’s Not Easy Being Green,” in California, it is easy being “green” because lawmakers are anxious to lavish benefits, at taxpayer expense, on those who claim a chlorophyll connection.
While the rumors that Kermit has applied for tax credits based on his being green are probably pure fiction, his parent company, Disney, may be about to apply for a handout based on their glamour factor.
That’s right, the glamorous are also part of the Sacramento “in” crowd, and nothing is more glamorous than Hollywood. That’s why Democratic Assembly members Gato and Bocanegra have introduced what they are calling the California Film and Television Job Retention and Promotion Act, legislation to extend and expand a state program that provides tax credits to movie makers who are chosen through a lottery. Until now, these subsidies have been limited to $100 million annually, but we may be about to see this outlay nearly quadruple.
Backers of more money for Hollywood justify this generosity at taxpayer expense by saying that other states are luring away cinema production with tax breaks and we need to keep those industry jobs here in California. However, many of the studios that are now clamoring for a handout are the same ones that have supported higher state and federal taxes on others – studios contributed generously to help pass Proposition 30 in 2012, which was a $6 billion annual tax increase on Californians. And what about the powerful Hollywood Left? Imagine how they would react if, for example, bankers were lining up for tax credits. We’d hear all kinds of shrill accusations that the “one percenters” were trying to rob us blind. But when the wealthy entertainment industry moguls want access to taxpayer cash, the Left is so quiet one can hear the chirping of crickets.
Meanwhile, in the real world, if you own a restaurant, hardware store, barber shop or any one of hundreds of other business not considered green or glamorous, don’t expect to get a tax break from Sacramento any time soon, even if you are non-polluting, employing several employees and providing an important service to the community. Sorry, but like the unattractive people in line to gain entrance to a posh dance club, you lack glamour and will be deemed a mere “commoner.”
So here is a suggestion that will make sense to everyone except those wealthy interests already feeding at the Sacramento trough. Let’s stop taxing most Californians more for the purpose of taxing influential, special interests less. Let’s lower the tax burden on everyone, not just the favored few who are in with the Sacramento “in” crowd. Let’s make our state a destination for new business, a state where existing businesses want to expand and not continue as a place from which businesses, not receiving corporate welfare, are fleeing.
Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.