By Michael Lucci -
Chicago is a great place to make a movie. Tom Cruise got his big break in the North Shore-based drama “Risky Business,” and comedy star Vince Vaughn claims the Windy City as his home. Film favorites ranging from “Ferris Buehler’s Day Off” to “The Untouchables” and the annual Christmas viewing requirement that is “Home Alone” exhibit the city’s tough history, modern quirks and its dynamism.
And Chicago brought in record film revenue in 2013. Film projects including “Transformers 4,” “Chicago Fire”and “Chicago P.D.” produced an estimated $358 million in local spending for the city.
What isn’t always mentioned are the tax breaks that film and television production groups receive to make movies in Chicago. These include a 30 percent tax credit on goods and services purchased, which in fiscal year 2012 amounted to nearly $12 million in tax breaks. Last year’s record revenue came with record subsidies, estimated at $39.3 million.
Somebody has to pay for these subsidies, and that somebody is the small-business owner. Small businesses have to pay increased taxes so politicians can subsidize businesses they favor. The state regularly engages in cronyism to keep big-name businesses here, such as giving $77 million in tax relief to the Chicago Mercantile Exchange, and subsidizing the slow decline of Sears Corp. to the tune of $15 million per year.
Subsidizing the film industry is more of the same.
A real subsidy to the state economy would be to give up on cronyism, cut taxes and regulations, and free up entrepreneurs and innovators to build a future that is brighter than our past.
Michael Lucci is Director of Jobs & Growth at the Illinois Policy Institute