Wednesday, July 23, 2008

Jealous Much

I guess now that I'm famous, it is only logical that I start to hang out with famous people. So, it was only sensible that as I walked around the streets of Ann Arbor last evening, I happened upon Mr. Jimmy Fallon strolling in the opposite direction. That's right, Jimmy Fallon. I can sense your jealousy through the computer screen.

In truth, it was actually pretty cool, regardless of your opinion of him or his humor. I only talked with him for a brief few moments, but I wished him luck regarding his eventual takeover of Conan O'Brien's show and he referred to me as a "cool guy". I'm not sure what that means - must be some sort of hip California lingo. I also suggested that he give a shout out to Michigan in future endeavors and he said that he is having a great time in Michigan so far. Meeting famous people is weird. Even the most insignificant but slightly famous person can make me giddy like a schoolgirl. When I shook his hand, all I could think was "wow, this is the hand that touched Rachel Dratch." He seemed like a pretty nice guy.

I have no idea what he was doing in Ann Arbor, but I have to assume it has something to do with the recent tax credit law passed in Michigan. I don't have a proficiency for tax law, but my basic understanding is that Michigan will provide to a production company a tax credit up to 42% of total production costs if that company produces a movie in Michigan. There has been some debate as to whether or not this law hurts Michigan or helps Michigan financially, and I am going to do my best to clear up the confusion.

Any business in a state owes taxes to that state. This is also true with movie production. Let's say for a movie with a $100,000 budget, that movie owes $50,000 in taxes. Under the new state law, Michigan will provide a tax credit of $42,000, so the production company only owes $8,000 in taxes. Perhaps the most important thing to keep in mind is that the cost of the tax credit, by law, cannot exceed the actual taxes owed, so Michigan can not "lose" money in this situation. The biggest downside is that, using my current example, Michigan will only "make" $8,000 in taxes instead of the full $50,000. Advocates (including myself) argue that the new system is not losing Michigan $42,000, but rather bringing in $8,000 because the production companies would do business elsewhere without the new incentive. It is a difficult balancing act.

The hope is that the increased number of movie projects will offset the cost of "lost" taxes, as well as foster the development of businesses related to movie production. I guess only time will tell, but it is the type of idea required to spark new and creative industries in a state that is in great need of such development. As I type, Clint Eastwood is filming a movie in several metro-Detroit locations (or he would be if he wasn't asleep) called Gran Torino and Drew Barrymore is filming a movie called Whip It, not to mention a series of other projects that I can't remember offhand.

Plus, I got to meet Jimmy Fallon - or Jimbo as I now call him.


Craig Frankland said...

I am also a proponent of the tax savings. Perhaps the best thing for Michigan is the residual dollars that are spent. While the State of Michigan may not get the full load of taxes restaurants, hotels, tourist type businesses, etc... all should see an increase in business. I'd have to imagine that high end hotels, casinos, and restaurants are now thrilled that Hollywood people are coming to the state.

Anonymous said...

Good deal...and I think I found a new daily site.

-Dan Anderson