California's tax initiatives for the film and television industry have sparked significant debates. Gov. Gavin Newsom and Los Angeles Mayor Karen Bass have championed these measures as crucial for job retention and economic revitalization. However, the reality is far from what is advertised.

Unveiling the True Costs of California's Tax Breaks

Government's Misguided Priorities

The State of California's tax initiatives aimed at bolstering the film and television industry were touted as essential. But in reality, they are just another example of the government funneling public funds into the coffers of wealthy corporations. Workers and local communities bear the brunt of austerity and exploitation. This dynamic is not unique to California; similar initiatives in other states have also had negative impacts. 1: In Georgia, for instance, similar tax breaks have enriched corporations while degrading wages and working conditions for workers. The California Film & Television Tax Credit Program, expanded repeatedly under Gov. Newsom, allocates hundreds of millions of dollars annually in tax credits to major studios. In October, Newsom announced plans to increase the cap from $330 million to $750 million a year. 2: Statistics from the California Film Commission show that since the inception of the tax incentive program, 702 projects have been approved with total California expenditures reaching $26 billion, and $3.3 billion being for tax credits. But the beneficiaries are not the struggling workers; they are the corporate behemoths like Disney, Warner Bros., and Netflix.

The Disparities in Wages and Profits

Despite record profits for entertainment conglomerates, talent and crew have seen stagnant or declining wages when adjusted for inflation. The 2023 strikes by the Writers Guild of America and SAG-AFTRA highlighted these disparities. Even as workers picketed for fair contracts, Newsom and Bass continued to promote the tax credits. 1: A report from governing.com revealed that audits by various states have shown that film tax credits often cost more than the revenue they bring in. In New York, for every dollar in tax breaks, the state receives around 15 cents in direct tax revenue. In Georgia, film tax credits cost taxpayers nearly $1 billion annually with a return of investment of only 19 cents per dollar spent. 2: Most of the tax credits go to productions backed by major studios, not independent creators. This leaves the working class shouldering the financial burden through wage cuts and higher local taxes.

The Role of the Entertainment Industry Council

Mayor Bass inaugurated the Entertainment Industry Council, which now plays a key role in shaping and administering these tax credit programs. The Council includes corporate executives and union officials. While union leaders claim to represent workers' interests, their participation in such bodies shows their deep integration into the corporate apparatus. 1: For corporate executives, the tax credits represent a guaranteed return on investment. With subsidies underwriting production costs, studios can maximize profits while minimizing risk. The working class, on the other hand, suffers. 2: The trajectory of Georgia's film industry offers a cautionary parallel. While studios have made huge profits, workers have faced declining wages and deteriorating working conditions. Safety conditions have also deteriorated with several accidents highlighting the lack of oversight.

The Betrayal of Union Bureaucracies

The latest contract forced through by IATSE this summer did nothing to alleviate the brutal work schedules for below-the-line workers. The much vaunted wage increases left workers making less money in real terms than before the pandemic. IATSE has never called a national strike in its history, showing its lack of commitment to workers' rights. 1: The California tax credit program is not an investment in the future of the industry; it is a giveaway to the rich financed by public funds. Workers must organize independently to challenge corporate power. 2: The 2023 strikes demonstrated the power of collective action, but also the limits of a movement constrained by union bureaucracies. A genuine fight for workers' rights requires breaking with these institutions and building a movement rooted in rank-and-file committees.The World Socialist Web Site is the voice of the working class and the leadership of the international socialist movement. We rely on the support of our readers. Please donate today!