by Jon Sanders
Director of the Center for Food, Power, and Life, Research Editor, John Locke Foundation
In 2013, the popular Netflix series “House of Cards” began filming in Maryland, splitting that state’s fully refundable film production tax credits with HBO’s “Veep.”
The show was so popular that by 2014 its producers immediately began seeking even more tax incentives from the state. It was a notorious example of the kind of behavior tax incentives engenders. Researcher Michael Thom termed it “an extortive political economy” in a study published last year in The American Review of Public Administration.
Here is how the producers of “House of Cards” pressured Maryland leaders:
A few weeks before Season 2 of “House of Cards” debuted online, the show’s production company sent Maryland Gov. Martin O’Malley a letter with this warning: Give us millions more dollars in tax credits, or we will “break down our stage, sets and offices and set up in another state.”
A similar letter went to the speaker of the House of Delegates, Michael E. Busch (D-Anne Arundel), whose wife, Cynthia, briefly appeared in an episode of the Netflix series …
Despite a raucous debate, “House of Cards” didn’t get the film tax credits boosted in 2014. Maryland legislators did, however, find “House of Cards” $7.5 million’s worth in other grants to buy them some time. Priorities.
Meanwhile, the Maryland Film Industry Coalition did what other film coalitions do: they produced a study suggesting every state dollar given in film production tax credits yields several times over in economic impact.
The Maryland Department of Legislative Services also studied the program, concluding in an October 2014 that the tax credits resulted in fewer jobs, lower personal incomes, and slower state GDP growth. In keeping with numerous other third-party studies of state film incentives programs, this one found that every dollar given in film production tax credits returned only six cents back.
In 2015, however, the Maryland General Assembly buckled spectacularly, more than tripling its film tax credits. “House of Cards” forever!
Then something happened Monday:
Netflix Cancels “House Of Cards”, Says It’s “Deeply Troubled” Over Kevin Spacey Claims
As allegations of unwanted sexual advances in 1986 by Kevin Spacey against then-14-year-old Anthony Rapp have emerged, Netflix today decided to pull the plug on the Spacey-starring House of Cards after the upcoming sixth season next year.
One wonders if Maryland taxpayers think it was all worth it.