Why Hollywood Went Southern (Hint: Taxes)

Posted: Jan 27, 2013 12:00 PM


Hollywood is shifting production away from Los Angeles thanks to something many of its stars seem to oppose—lower taxes.


Excerpted from Townhall Magazine's February feature, "Why Hollywood Went Southern," by John Hanlon:

In the 2011 blockbuster “Battle: Los Angeles,” the City of Angels faced an attack from an outside force that threatened everyone in the town and their way of life.

In reality, though the alien enemy from that film doesn’t exist, an outside force has significantly undercut the vibrancy of a town known for its vast array of film and television productions. The external force? Tax credits, which are quickly moving film and television productions far away from the Hollywood Hills.

The production of “Battle: Los Angeles” brings this situation into stark focus.

Ironically enough, the movie about aliens attacking Los Angeles was predominantly shot far away from the city it portrayed. Much of “Battle: Los Angeles” was actually filmed in Louisiana, a state that is taking full advantage of California’s high taxes and helping to create a burgeoning industry in the state. As the Los Angeles Times reported, “Except for the movie’s opening sequences at Camp Pendleton and the alien beach attack in Santa Monica, 90% of the film was shot in Louisiana’s capital, Baton Rouge, and Shreveport in the northwest part of the state.”

This wasn’t the first time that Hollywood surrendered a major production to a state that was actively competing with California for business. What is interesting, though, is that despite seeing the effect a higher tax burden is having in their industry as productions head to the South, many celebrities continue to extol the virtues of higher taxes.

Big Screen Federalism

In many political debates, conservatives usually argue states should often be empowered to make their own economic decisions. Small-government advocates note that, when the federal government backs off, individual states can compete with one another for businesses, jobs and economic prosperity.

The value of such competition can clearly be seen in the filmmaking 0H Economy industry over the last decade. While Hollywood has always competed with foreign locations and cities in the United States for film and television productions, the competition has stiffened over the past 11 years.

That’s because in 2002, everything changed.

Anthony Cave, reporting for the New York Times Student Journalism Institute, wrote that “[i]n 2002, the Louisiana legislature passed the Louisiana Motion Picture Tax Incentive Act, which gives movie productions that spend at least $300,000 in the state a 30 percent tax credit on those expenses.” Cave reported that New Orleans—for instance—was greatly rewarded because of such credits. He wrote, “MovieMaker magazine ranked New Orleans, dubbed ‘Hollywood South,’ as the No. 1 city for moviemakers in 2012.” In the years after the tax credits passed, film productions have moved to the Bayou State, including high-budget films like “Battleship” and “Twilight: Breaking Dawn.” ...

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