(Carolina Journal) Less than a month after North Carolina legislators approved more money for the state’s film tax incentives program, a new John Locke Foundation Spotlight Report pans film incentives as a clear example of cronyism.
“The problem with these incentives is that the lower tax burden on film productions comes with the consequence of keeping tax burdens high on nonfavored businesses and industries,’” said report author Jon Sanders, JLF Director of Regulatory Studies. “When government chooses one industry or business for special deals and breaks, there’s a good chance that cronyism is at work.”
While detailing problems linked to film incentives, Sanders devotes another newly released Policy Report to the general problem of cronyism. Together, the two reports launch a new multipart series titled “Carolina Cronyism.”
“Cronyism is an umbrella term covering a host of government activities by which an industry or even a single firm or speculator is given favors and support they could not attain in market competition,” Sanders explained. “Examples include regulations that help favored businesses, laws that restrict new competitors from entering a market, government-sponsored cartels and monopolies, mandates requiring consumers to buy government-favored products, and tax breaks targeting specific businesses.”
State lawmakers added $60 million for film incentives in the final days of this year’s legislative session. Sanders’ report focuses on film incentives’ basic flaws.
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