The Los Angeles Times reports that the FBI is looking into the activities of a lawmaker with regards to a tax credit proposal he made. From the article:
Calderon pushed to extend tax breaks to productions of less than $1 million. He and family members received a total of $10,800 in campaign contributions from an independent producer who could have benefited from the change Calderon advocated.
Despite a dubious track record, states continue to award tax incentives for job creation. Some of the latest tax credits awarded went to twelve companies in Ohio. The Cincinnati Business Courier reports:
The companies are expected to create 1,265 jobs across the state and more than $66.4 million in new payroll while providing $187.4 million in investments.
The Tax Foundation put together an informative map of state business tax credits.
In a case of deliberate “double dipping,” a building project in Newark, NJ could receive government support from three different programs. From The Star-Ledger:
The state Economic Development Authority yesterday approved $23.8 million in tax credits under the Urban Transit Hub program, and $8.3 million under the Economic Redevelopment and Growth Grant program for the Newark project. It also cleared the way for the city Financial Board to approve $6.5 million in redevelopment bonds, which will be purchased by Prudential Insurance.
Darius Dixon from Politico.com has recently covered the latest investigations that have occurred in Oregon, concerning wind farms and the new tax credits and loan guarantee that companies like Solyndra are receiving.
An Oregon newspaper’s investigation into the state’s support for a massive wind project is scratching at old wounds about the federal Energy Department’s loan-guarantee program.
A series of stories by Oregonian reporter Ted Sickinger has raised questions about the state energy department’s decision to offer tax credits to Caithness Corp.’s Shepherds Flat wind project. But his latest article also cites past divisions within the White House about federal support for the project, which the U.S. Energy Department awarded a partial loan guarantee of $1.3 billion in 2010.
Andrew Evans from The Washington Free Beacon reports the bankruptcy of Flabeg Solar, a mirror manufacturer from PA. The mirror manufacturer’s bankruptcy might severely affect the stability and economic efficiency of some of the solar projects funded by the government. The company has received $19 million in state and federal grants, loans, and tax credits.
Flabeg Solar U.S. Corp., a mirror manufacturer based in Pennsylvania, filed for bankruptcy on Tuesday after it could not afford to pay several former employees their severance packages, the Pittsburgh Post-Gazette reported.
Flabeg is reported to have received millions of dollars in financial assistance from federal and sate governments. Pennsylvania helped the mirror manufacturer build its plant near Pittsburgh with $9 million in grants and loans. The Obama administration awarded Flabeg $10.2 million in tax credits, according to the Post-Gazette.
Matt Mitchell from the Mercatus Center has a blog post on loopholes and the relationship between loopholes and cronyism. He particularly focuses on accelerated depreciation. Is accelerated depreciation a loophole?
The idea that “accelerated” depreciation is a loophole can be traced back to Stanley Surrey, the Harvard law professor whose work in the 1950s, 60s, and 70s influenced many tax reformers, including Senator Bill Bradley and officials in the Reagan Treasury Department. When the Congressional Joint Committee on Taxation began cataloguing loopholes in their annual “tax expenditure” list in 1972, they too called accelerated depreciation a loophole.
This thinking persuaded me to list accelerated depreciation alongside other tax loopholes as a privilege. In conversations with friends and colleagues over the last few weeks, however, I’ve come to change my mind on this one.
Glenn Harlan Reynolds from The Wall Street Journal has written the following column, stressing how at the Academy Awards Ceremony the only story that didn’t get a nomination was Hollywood and Corporate Welfare. The movie industry supports on the surface higher taxes on the rich, but on the side gets more than $1.5 billion in government handouts.
With campaign season over, you’re not likely to hear stars bringing up taxes at this weekend’s Academy Awards show. But the tax man ought to come out and take a bow anyway. Of the nine “Best Picture” nominees in 2012, for example, five were filmed on location in states where the production company received financial incentives, including “The Help” (in Mississippi) and “Moneyball” (in California). Virginia gave $3.5 million to this year’s Oscar-nominated “Lincoln.”
Show-Me Daily’s Michael Rathbone points out that Missouri’s wine industry tax credits aren’t necessary; the industry existed and thrived long before the state’s tax credits showed up.
These wineries managed to stay in business for decades without the assistance of this tax credit. Going even further back, Missouri had the second-largest wine industry in the country before Prohibition.
Read the whole post here.
The Commonwealth Foundation points out that one of the main arguments for film tax credits, that the tax credit is necessary to bring film production to the state, doesn’t play out.
In fact, most movies and other productions filmed in Pennsylvania don’t receive the film tax credit. This fact undermines the argument we need a bigger tax credit (or one at all) to attract films.
Read the rest here.