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The Folly of Film Subsidies in Arkansas

film subsidies-01Of all the business enterprises in Arkansas, filmmaking seems to deserve a government handout the least. It is hardly a core function of state government to fund Hollywood’s latest blockbusters or to subsidize stars who make millions of dollars for showing up on set. Of course, over two-thirds of states offer film subsidies: Arkansas is one of them. Supporters of film subsidies contend that these subsidies are necessary to lure film production from other states. They claim that the subsidies stimulate a state’s economy and return money to state coffers through increased tax collection. However, when independent studies are done to look at the actual effects of these subsidies, they rarely (if ever) live up to such grand expectations. In states around the nation, film subsidy programs have failed to “pay for themselves” in terms of increased tax revenue. Their track record for job creation and economic growth is weak. They divert money away from necessary government functions, such as prisons and highways. In short, these subsidies by and large enrich Hollywood producers at the expense of state taxpayers. AAI’s newest paper, The Folly of Film Subsidies in Arkansas, argues that there is little or no reason to believe that such subsidies are truly worth the expenditure of the millions of taxpayer dollars they require.

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