Hollywood strike highlights unfairness of film tax subsidies

As the Hollywood actors strike continues, it’s a stark reminder that all workers are essential, and no industry can operate without them.

The Screen Actors Guild and the Writers Guild of America went on strike this summer to demand fair wages and better working conditions for tens of thousands of employees of the Alliance of Motion Picture and Television Producers who make it possible for Americans to enjoy TV, radio, podcasts, and movies. The everyday workers involved in this strike receive far less compensation than Hollywood executives with multi-million-dollar salaries and huge stock payouts.1 Actors on some of the most successful shows on the country’s biggest streaming platforms have shared how little they make and how harmful the pay structure is for professionals whose work appears on streaming services like Netflix and Amazon Prime.2

Why then, are Maine lawmakers proposing to expand visual media tax subsidies in Maine — also known as the film tax credit — that give money away to production companies and studios who profit from the work of people currently on strike? There are better ways to support the arts and artists in Maine directly than giveaways to corporations that profit off the hard work of the artists they employ.

Big studios and production companies should not be eligible for Maine’s existing film tax subsidies. Instead, it should be confined only to small production companies that otherwise would not have the capital to fund their projects. The current subsidy benefits businesses that can already afford to fund costs up front and reap benefits later. This subsidy structure doesn’t help support Maine production companies that are struggling to get off the ground and projects that otherwise would not occur.

Research conclusively shows film tax subsidies are costly and ineffective. Evaluations of programs in several other states with much larger film tax subsidies than Maine’s have shown they are a bad investment that siphon millions of dollars in public funds from other priorities and give public money to big Hollywood studios and production companies. The Massachusetts credit, for example, costs the state an estimated $56 million to $80 million per year. Researchers found the cost of the program amounted to over $100,000 per job created in the state.3 Louisiana, which has one of the largest film tax credits in the country, found a return of less than 40 cents for every dollar invested in its Motion Picture Investor Tax Credit, which costs the state almost $200 million each year.4 Georgia spends almost $1 billion per year on its film tax credit.5 Maine cannot afford to give away such a sizable portion of its budget to even begin to compete with the massive giveaways in other states, and we shouldn’t try.

A recent review by the Maine Legislature’s Office of Program Evaluation and Government Accountability (OPEGA)6 found in some cases Maine’s visual media subsidies weren’t used to fund the arts at all. L.L.Bean, for example, was able to claim subsidies several times for producing its catalog. In other cases, productions were subsidized that included little or no filming in Maine, or that did not identify or acknowledge Maine as the filming location. Only half of the productions receiving subsidies were based in Maine. OPEGA also confirmed what several other studies of visual media subsidies have found: they are unlikely to be an efficient method of driving tourism. OPEGA identified a host of other concerning program administration issues that call into question the value of this program and the Maine Film Office itself to Maine taxpayers. OPEGA was also unable to examine information about the quality of the jobs created, including wages and length of employment, by those that received the film tax subsidies because no data was collected.

There are better ways for Maine to support the arts than visual media tax subsidies. Expanding this program should be off the table until it is seriously reformed, and in the meantime, it should be suspended.


[1] Liu, Jennifer. “The top Hollywood exec made $498 million in the last 5 years—384 times as much as the average writer.” CNBC, 1 June 2023. https://www.cnbc.com/2023/06/01/top-hollywood-exec-made-498-million-in-5-years-while-writer-pay-fell.html

[2] Adekaiyero, Ayomikun and Esme Mazzeo. “Actors are revealing how little money they make as the SAG-AFTRA strike rolls on.” Business Insider, 4 August 2023. https://www.insider.com/actors-revealing-how-little-money-make-sag-aftra-strike-2023-7

[3] Department of Revenue, Commonwealth of Massachusetts. Report on the Impact of Massachusetts Film Industry Tax Incentives through Calendar Year 2016. 20 Feb 2020. https://www.mass.gov/doc/dor-report-on-the-impact-of-massachusetts-film-industry-tax-incentives-through-calendar-year-7/download

[4] Louisiana Department of Revenue, Return on Investment Analysis: for Selected Louisiana Tax Incentive Programs, March 2022. https://revenue.louisiana.gov/Publications/Return%20on%20Investment%20Report%202016%20-%202021%20WEB.pdf

[5] Georgia Department of Accounts and Audits, Georgia Tax Expenditure Report for FY 2024. Dec 2022. https://opb.georgia.gov/budget-information/budget-documents/tax-expenditure-reports

[6] Office of Program Evaluation and Government Accountability, Visual Media Incentives – Maine’s Visual Media Incentives Have Had Limited Effect and Have Not Been Adequately Administered. March 2023. https://legislature.maine.gov/doc/9940