tonight-show-jimmy-fallon-150x150-3874637Gov. Cuomo today announced yet another enormous state tax subsidy for the entertainment industry — this time for Disney and Netflix to produce a live-action Internet TV series based on Marvel Comics superheroes in New York City.

The incentive will come out of New York’s $420 million-a-year Film and TV Production Credit program, which reimburses up to 30 percent of production costs in New York. It’s a sweet deal, as explained in an unpublished research study prepared for the governor’s Tax Reform and Fairness Commission last fall:

… Based on IRS industry-specific data, a 30 percent credit would equal about 55 percent of taxable income of a typical film production firm. In 2008 (the latest year for which detailed data are available), the credits received by 31 film production industry taxpayers exceeded the combined tax liability of the entire industry — all 1,600+ firms — in nine of the ten previous years. Because the credit exceeds tax liability many times over and is refundable, in effect it is a program of cash payments by the state to credit recipients. [emphasis added]

Note: the comic book characters in question are known as the “flawed heroes of Hell’s Kitchen,” referring to a once notoriously tough neighborhood on Manhattan’s West Side. So the taxpayers of New York State will essentially be paying Disney and Netflix to lend verisimilitude to their production values. Otherwise–perish the thought!–people might start thinking of Daredevil, Jessica Jones, Luke Cage and Iron Fist as “the flawed heroes of a neighborhood in Toronto or Baltimore that has been made to look a lot like Hell’s Kitchen.”  Although, come to think of it, Hell’s Kitchen itself doesn’t really resemble Hell’s Kitchen anymore.

Cuomo’s news release announcing today’s deal credulously repeats industry-generated statistics suggesting that the film credits generate more than they cost in economic activity and job creation. But the Tax Reform and Fairness Commission research study exposed the fallacy behind those figures:

Although the film credits do appear to boost in-state production, that does not mean that they “pay for themselves,” as two recent consultant studies reported. To reach their conclusions, both studies made several questionable assumptions, including:

  • no credit-qualifying film would have been produced in NYS absent the credit despite the long-standing existence of a well-developed film production industry in the state;
  • and credit-qualifying film productions would cause substantial credit-ineligible film production activity to locate in New York to take advantage of a film production industry cluster that would not exist but for the credit.

Union-backed advocacy groups in Albany haven’t been shy in attacking Cuomo’s proposed across-the-board tax cuts on the grounds that they favor “millionaires and billionaires.”  So, any moment now, we can expect New Yorkers for Fiscal Fairness, the Alliance for Quality Education and their allies to issue statements attacking this giveaway to the millionaires and billionaires at Disney and Marvel.

Right? Anybody out there?

About the Author

E.J. McMahon

Edmund J. McMahon is a senior fellow at the Empire Center.

Read more by E.J. McMahon

You may also like

NY outlook: worse than 2008-09

#NYcoronavirus: The outlook for New York's economy is the grimmest on record, according to the first post-pandemic lockdown round of credible economic surveys and forecasts. Start with the Federal Reserve Bank of New York, whose regional economists today issued a notably pessimistic report based on their monthly Empire State Manufacturing Survey and a broader Business Leaders Survey that take sin the northern New Jersey and metropolitan New York. Read More

Big bucks, no impact

The billions of dollars funneled from New York's treasury to movie and TV producers had no statistically significant impact on the industry's employment in the Empire State through 2017, according to a new multi-state study of such tax incentives. Read More

SALT suit swept aside

In what could rank among the least surprising federal court rulings of this or any year, a U.S. District Court judge in Manhattan has rejected New York's constitutional challenge to the state and local tax (SALT) deduction cap in the new federal tax law. Read More

NY’s dimming budget outlook

When New York's current state budget was enacted, Governor Andrew Cuomo hailed it as "the broadest  and most sweeping" of his tenure, adding that "for the ninth straight year it was both timely and fiscally responsible." "Timely," yes: budget bills were passed by the Legislature just in time for the April 1 dawn of a new fiscal year. As for "fiscally responsible"—well, that's more a matter of opinion. Read More

Albany unleashes a green monster

The Climate Leadership and Community Protection Act on its way to enactment in Albany would vastly expand the state government’s power to regulate every corner of New York’s economy in pursuit of reducing greenhouse gas emissions. Yet even as it addresses what proponents describe as a “climate emergency,” the bill’s most controversial elements have been postponed until after the 2022 elections. Read More

NY per-pupil spending reaches $23k

New York's spending on elementary and secondary education reached a record $23,091 per pupil in 2017, once again topping  all other states in this category, according to the latest U.S. Census data. Read More

Side effects of the opioid tax

Industry lawsuits filed against Governor Cuomo's $100 million opioid tax, summarized in today's Wall Street Journal, are raising fresh questions about the levy's fairness and unintended side effects. Read More

Soaking the rich—or not

New York State's so-called millionaire tax, temporarily raising the state's top income tax rate to 8.82 percent from the permanent law limit of 6.85 percent, is next scheduled to expire at the end of 2019. The added tax generates roughly $4.5 billion a year, about 9 percent of net personal income tax revenues, making New York more dependent than ever on the highest-earning one percent of its taxpayers. The future of the tax has now emerged as an issue in the gubernatorial campaign. Read More


Sign up to receive updates about Empire Center research, news and events in your email.


Empire Center for Public Policy
30 South Pearl St.
Suite 1210
Albany, NY 12207

Phone: 518-434-3100
Fax: 518-434-3130


The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.