High Taxes Are Driving Hollywood Out Of California

When it comes to business and their bottom line, even liberal Hollywood types look for the best tax environment they can get. And increasingly, that’s not in California.

California’s share of U.S. feature film production dropped to 31% in 2008 from 66% in 2003, according to the California Film Commission. That largely reflects a falloff in the Los Angeles area, where feature filming activity in 2008 was nearly half what it was at its peak in 1996.
Television production, which recently has been a more reliable source of jobs in the region, is also declining. A recent survey from FilmL.A. Inc. found that 44 of 103 TV pilots this year were shot in such disparate locations as Canada, Illinois, Georgia, New York, Louisiana and New Mexico. …
More than 30 states have sought to outbid one another with tax credits and rebates aimed at luring productions away from California. Sacramento has responded with its first-ever film-tax credit program, but most analysts think the credits are too small and restrictive to have much effect.

Here’s the thing: If California would simply lower their taxes they wouldn’t need to offer complicated tax credits which, frankly, may save companies some money on taxes but still cost money in terms of compliance costs.
The solution is simple. California would see more economic activity related to the entertainment industry stay in California if they would simply lower their taxes. While tax credits are at least an indication that political leaders in the state are starting to understand what the problem is, the solution is much simpler.
Cut. Taxes.
That will lead to more business staying in the state. More jobs. And, probably, more tax revenues. What’s more, it would work for a lot of other industries in the state too.