The Tax Foundation’s Tax Policy Blog notes that the TLC reality show Sarah Palin’s Alaska “received a $1.2 million subsidy from the state of Alaska,” which means “Alaskan taxpayers covered a third of the cost of the show.” This leads the Tax Foundation bloggers to wonder “how government subsidies for reality TV fit into Palin’s broader view on the proper role of government.”
The Anchorage Daily News notes that this $1.2 million subsidy takes the form of tax credits, so it represents taxes not collected from the production company, rather than a million-dollar check written out of the Alaskan treasury. It’s still a subsidy in my book, although President Obama would disagree. In concert with Senator Debbie Stabenow (D-MI), he’s trying to change the tax credit issued with the purchase of each Chevy Volt into a rebate, handed out immediately at the moment of purchase. Clearly the Administration doesn’t think tax credits are as good as cold, hard rebate cash.
At any rate, the incentives granted to Sarah Palin’s Alaska were troubling to Jim Geraghty of National Review, who writes that “Everything Palin has done has been perfectly legal, but it looks problematic for a crusader for small government to end up collecting a seven-figure paycheck from an endeavor that received a seven-figure subsidy, all set up by a program she signed into law.”
As described by the Anchorage Daily News, the tax subsidy in this case “allows film and TV producers to recover 30 percent or more of the money they spend on filming” in Alaska. This is presumably intended to lure production companies to the state, where they will spend money, create jobs, and make Alaska look attractive to other businesses and tourists.
Sarah Palin’s Alaska, with its huge ratings, was doubtless one of the best tourist brochures Alaska has ever had. It definitely changed my impression of the state, which I had previously viewed as a perilous wasteland filled with vampires and shape-shifting aliens.
The economic benefits of such tax subsidies are open to question, but the Alaska program was “created by the legislature and signed into law by Palin” in 2008, long before she knew she’d be starring in a TV show. The production company, Jean Worldwide Incorporated, applied for the subsidy, not Palin herself. Other TV shows, including Ice Road Truckers and The Deadliest Catch, have received tax credits under the same program. I suspect they didn’t make driving or fishing in Alaska seem more appealing to prospective tourists.
What could Palin have done to soothe Jim Geraghty’s concerns? Insist the producers of her show refuse to take advantage of the substantial tax credit they were entitled to? Refuse to do the show? He’s probably right that she’ll take heat for it, but she takes heat for existing. Cable news outlets are happy to employ people like Bill Maher, who feel no qualms about referring to her with crude sexual insults. Somehow I doubt her appearance on a TV show that lawfully took advantage of a tax credit that has been on the books for three years will be her undoing. As subsidy scandals go, how does it stack up against Barack Obama’s pals at G.E. paying zero dollars in taxes on $5.1 billion in U.S. profits?
Looking at the bigger picture, if the rules of engagement for Big Government’s critics are “let she who is without subsidy cast the first stone,” then we’re in deep trouble. Every one of us is subsidized, compensated, penalized, and regulated by the unsustainable government collapsing around us. It is impossible to criticize this system from the “outside,” because none of us are outside of it.
I’m all in favor of wiping out this maze of targeted incentives and credits, particularly at the federal level. I don’t see why Sarah Palin’s appearance on a television program that took advantage of a state tax credit should automatically make her a supporter of direct federal subsidies, or a hypocrite for opposing them. If the people of Alaska want to terminate that program, it would be relatively easy for their legislature to do so… certainly much easier than cutting off the direct cash pipeline from our wallets into NPR and PBS, or getting the company run by Obama’s soulmate Jeffrey Immelt to pay a nickel of federal taxes.