Who wins, when Batman fights Superman? Not Michigan taxpayers.
Warner Bros. studios has decided to shoot its sequel to 2013’s superhero film “Man of Steel” in Detroit, taking advantage of a generous incentive program that awards subsidies to films produced in the state.
Taxpayers will dole out $35 million for the film, and generate $131 million in economic gains for the state, according to the Michigan Film Office.
“This project will further strengthen the reputation of Michigan and metro Detroit as a premier film destination,” said Margaret O’Riley, director of the Michigan Film Office, in a statement. “We look forward to the spotlight shining on our incredibly talented workforce and the businesses that support our film industry here in Michigan.”
But Michael La Faive, director of fiscal policy at the Mackinac Center for Public Policy, said the subsidy’s supporters neglected to consider the full cost of the program.
“If you were to factor the cost of the subsidy into the equation, it would be zero if not negative impact,” he said in an interview with The Daily Caller.
Defenders of the film incentive insist that an economic multiplier magnifies the gains from spending money on movies. But they neglect to multiply the loss of economic activity that would have resulted had taxpayers been free to spend their film subsidy money elsewhere.
This is not uncommon for film incentive programs, which have become increasingly popular around the country in the last decade, said La Faive.
“There’s no film program to my knowledge in the country that has returned to taxpayers more than it has taken,” he said.
When Michigan legislators approved the subsidy under former Democratic Gov. Jennifer Granholm, they hoped that it would create a lasting film industry in the state. Countless other states cling to similar hopes, however, and trying to out-subsidize each other has created an “economic arms race” among the states, according to a study by the Tax Foundation.
Instead of rooting themselves to one state or another, film studios simply move wherever the subsidy is currently the highest — meaning that Hollywood, rather than state taxpayers, get the most bang for the public buck.
“Lawmakers and others are blinded by the glitz and glam of Hollywood when they consider this public policy,” said La Faive.
Producers downplayed the importance of the subsidy in their decision to film in Detroit.
“Detroit is a great example of a quintessential American city, and I know it will make the perfect backdrop for our movie,” said Zack Snyder, the director, in a statement.
The film will star Henry Cavill as Superman/Clark Kent and Ben Affleck as Batman/Bruce Wayne.