NCPA - National Center for Policy Analysis


February 2, 2010

Mackinac Center scholars have been fierce critics of the Michigan Film Incentive.  They are not the only ones.  Several Michigan legislators, Lansing budget analysts and scholars have also spoken out against the program as being ineffective and too expensive, says Michael LaFaive, director of the Morey Fiscal Policy Initiative at the Mackinac Center. 

The Michigan Film Incentive is a state economic development program whereby state government offers large tax credits and outright cash subsidies to filmmakers who make some portion of their films here: 

  • The program rebates up to 42 percent of a filmmaker's Michigan expenses.
  • The amount that exceeds the filmmaker's state business tax liability is reimbursed by a check from the Treasury and signed by John Q. Taxpayer. 

Because the state faces another large budget deficit, there is serious talk about reducing or eliminating the $100 million-plus boondoggle.  Knowing from the start that their program is vulnerable to economic realities (not to mention political ones and common sense), film incentive officials should have been relatively sensitive about avoiding whiffs of impropriety, says LaFaive. 

So it is baffling to see the state offer Michigan filmmaker Michael Moore a refundable tax credit for his documentary "Capitalism: A Love Story."  This subsidy should be rejected by Moore on principle alone, says LaFaive: 

  • Moore is a current member of the Michigan Film Office Advisory Council, a state organization created to advise the Michigan Film Office, which is responsible for approving applications for Michigan's film incentive program.
  • His very presence on the council may have led to the film office approving special tax treatment for his work.
  • Giving an advisory council member's project tax credits makes this government "jobs" program look like a good ole' boys network that takes care of its own with taxpayer dollars. 

Even worse, Moore is set to feed on Michigan's beleaguered taxpayers at a time of great economic hardship: 

  • The Great Lake State has had the highest unemployment rate in the nation for 46 months and currently stands at 14.6 percent.
  • As measured by state gross domestic product (GDP), Michigan has experienced a lost decade of economic growth.
  • Worse, Michigan's per-capita personal income rank among the states has plummeted from 23rd to 37th since 2003.  

Source: Michael D. LaFaive, "Michael and Me and Taxpayer Makes Three," Mackinac Center, January 28, 2010. 

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