Sunday, January 3, 2010

Dazed and Very Confused

Yet again I need a lesson in business. Michigan's film tax credits are under ongoing review in Lansing and elsewhere in the state, and I have no idea why. I need to see a business breakdown to get my hands around the hypothetical "problem" (see how I said hypothetical and then put problem in quotes to cast double the doubt on this side of the argument) or maybe someone out there is smart about this kind of thing.

Again, some legislature types are suggesting that Michigan's television/film tax credits are overly generous for a state with dwindling tax revenue and budget gaps. I can't begin to understand how this is the case and I really, truly hope I can hear a good explanation for the anti-tax credit side of the argument because every time I read one of these articles, I feel as stupid as when I am watching Wheel of Fortune.

Let's think this through together. I have a big huge empty house and when the house is empty, I make no actual money off the house. In fact, just holding on to the house costs me money. Looking for some revenue, I approach my neighbor, Bryan Cranston and say "Bryan, I know you are a chemistry teacher and I want to set up a meth lab in my house and you only have to pay me $100/week for the use of my space." But wait, there's more Bryan, because I know there are so many other empty houses for meth labs out there, I'm going to only charge you $50 for my space. That sounds like a win-win for both my meth cooking neighbor and me because he has a place to do his business and I make $50 I would not have made before.

Not only do we both win, but there are other tangential people who win from this business transaction. All of the local raw material and chemistry hardware suppliers now have a buyer of their goods closer to them because this guy set up shop in my property. Security guards are hired to protect the laboratory and local mechanics probably make a buck by reinforcing the car materials for additional mobile protection. The only people who lose are the people in other towns who could have had this very safe and legal source of income, but instead my house is ground zero.

I don't give Bryan money to build his lab in my property, he gives me money, just not the $100 that was the originally quoted rent. However, if I did not give him the discount, he could have chosen any number of seedy locations to produce his goods for eventual barter.

Based on this Breaking Bad logic, I can't begin to understand how these film tax credits are damaging Michigan's financial situation. This debate is painfully frustrating because I can't even come up with a metaphor to describe how frustrating it is. I mean, what is there to argue? What is negative about taking half of a pile of free money versus not even having access to the pile? See, I still can't come up with a good metaphor. This is so very confusing.

1 comment:

Jeff Caminsky said...

Obviously, you aren't cut out for a career as a politician: your reasoning is entirely too laden with reason and common sense. For our political leaders, the "pile of free money" belongs entirely to them, and they dole it out grudingly to those they deem worthy to share it with. The fact that "a full pile of nothing" is less than "a half-pile of something" doesn't seem to register. (I suspect many of them probably failed basic math at school, but I really haven't seen any empircal data to support the hypothesis).