Picture these two people: one is a wealthy Hollywood studio executive looking to film another Disney blockbuster and add to the billions in revenue for his company, the other is a single mother wanting to buy a Disney movie from the discount bin for her child’s birthday.
Which one does Gov. Perdue think deserves a tax break, and which one does Perdue think should pay more taxes?
Last week’s headlines cleared up any doubt about the answer.
According to news accounts, the N.C. Film office reported that 2011 was perhaps a record-setting year for television and movie production in our state. One of the main reasons: a generous tax break offered to production companies. Indeed, Perdue not only whole-heartedly supports these breaks, she wishes she could extend even greater tax breaks to Hollywood millionaires.
According to Perdue, North Carolina’s Hollywood tax breaks do “not go far enough,” and “the people of North Carolina understand that when you bring in an Academy Award winner as an actor or an actress, you’ve got to pay them.”
And just who is the “you” Perdue refers to when insisting someone needs to pay more so that poor-old Robert Downey, Jr. can have a little more walking around money?
Enter our single mother at the discount bin.
The day after the media announced the Tar Heel tax break bonanza for Hollywood big shots, Perdue declared her desire to suck another $750 million from the pockets of struggling North Carolinians courtesy of a sales tax hike. Perdue downplayed the cost imposed on citizens living paycheck to paycheck and in fear of losing their job as just chipping in “a fraction of a penny for progress.”
Political observers must be scratching their heads and muttering aloud “what is she thinking?” For the sitting Governor of a state struggling with unemployment hovering well above the national average, floating the idea of a three-quarters of a billion dollar tax hike while at the same time championing ever larger tax breaks for millionaire actors and billion-dollar movie studios is mind-numbingly out of touch.
The Governor’s efforts to brush off the sales tax increase as merely a “fraction of a penny,” and thus something nobody will notice, is more evidence of Purdue’s cluelessness. On the surface, it doesn’t seem like much, but some back of the envelope calculations suggest the impact of a sales tax increase on the average household would be noticeable. A $750 million tax increase divided by roughly 3.5 million North Carolina households works out to $214 per household. That equates to, for example, about 60 gallons of gas at current prices – enough fuel to get a person to work and back for 15 weeks (assuming an average one-way commute of 10 miles). For working families watching every dime in their budget, that’s no trivial sacrifice.
Compare that proposal with Perdue’s support of extending even more tax breaks to Hollywood studios. Two of the primary beneficiaries of the film tax breaks last year were Marvel Studios and New Line Cinema. These companies are subsidiaries of entertainment industry goliaths Disney and Time Warner, respectively. Time Warner’s 2010 revenue totaled $27 billion. The Walt Disney Company tallied 2010 revenues of $38 billion – roughly twice the state of North Carolina’s total state revenue for the 2011 fiscal year. What difference does a tax break of a few hundred thousand dollars make in their livelihood?
Amazingly, Gov. Perdue wants to raise the amount we pay when buying clothes for our children or that discount Disney movie in order to help balance her budget plan.
But filthy rich movie stars and multi-billion dollar movie studios? The Guv says give them a break. All in the name of “progress,” of course.
This fall, Perdue will face a re-election and voters will choose sides at the ballot box. Perdue has clearly shown where her allegiances lie. Will the voters follow?