How Leonardo DiCaprio Cost New York Taxpayers $30 Million

Special tax incentives for filmmakers mean moviegoers shell out more than they think to see popular films.

Actor Leonardo DiCaprio.
National Journal
Marina Koren
Jan. 22, 2014, 10:55 a.m.

The people of New York may think one of last year’s biggest films only cost them a $15 tick­et, but they’d be wrong.

Thanks to state law, The Wolf of Wall Street re­ceived a 30-per­cent pro­duc­tion tax cred­it from New York State, which means tax­pay­ers paid for $30 mil­lion of the movie’s $100 mil­lion budget, ac­cord­ing to the Man­hat­tan In­sti­tute, a non­profit, non­par­tis­an eco­nom­ic re­search and policy group.

But New York­ers were not the only ones to shell out cash for the most pop­u­lar films of 2013. All nine films nom­in­ated for the Best Pic­ture award at the Oscars this year, which will air in March, were filmed in states and coun­tries that of­fer tax in­cent­ives to film­makers.

Amer­ic­an Hustle re­ceived a 25-per­cent tax cred­it for its $40 mil­lion budget from Mas­sachu­setts, while Her got a 20-per­cent tax cred­it from Cali­for­nia for its smal­ler $25 mil­lion budget. Cap­tain Phil­lips re­ceived a $300,000 grant for film­ing in Vir­gin­ia. Grav­ity and Philom­ena re­ceived 45-per­cent tax cred­its each from the United King­dom. Dal­las Buy­ers Club and 12 Years a Slave had sig­ni­fic­antly smal­ler budgets, but re­ceived big cred­its, thanks to Louisi­ana, which of­fers the best movie-pro­duc­tion in­cent­ives in the coun­try.

Movie pro­duc­tion means busi­ness, and busi­ness is gen­er­ally good for loc­al eco­nom­ies. But foot­ing the bill for movie pro­duc­tion doesn’t pay off for states as much as their lead­ers would hope.

Film pro­duc­tion may cre­ate jobs in a giv­en state, but they usu­ally dis­ap­pear by the time film­ing wraps up, mark­ing only a blip in long-term em­ploy­ment ef­forts. The lure of a movie set and its stars may boost tour­ism, but that eco­nom­ic be­ne­fit is tem­por­ary too. Big­ger spe­cial­ized tax breaks also usu­ally mean re­duced rev­en­ue, which means “states have less money spend on teach­ers, roads and po­lice,” the Man­hat­tan In­sti­tute re­port ex­plains.

The real win­ners here are the film­makers and their block­busters. Wolf of Wall Street is nom­in­ated for five Oscars this year, in­clud­ing a Best Act­or nod for Le­onardo Di­Caprio, who won a Golden Globe last week for his per­form­ance.

{{ BIZOBJ (video: 4671) }}

What We're Following See More »
Libertarians Getting a Second Look?
3 hours ago
Trump Floats Gingrich, Kasich as Running Mates
3 hours ago

Newt Gringrich is actively positioning himself as a possible VP nominee for Donald Trump, according to National Review. After a New York Times piece mentioned him as a possible running mate, he said, "It is an honor to be mentioned. We need a new Contract with America to outline a 100-day plan to take back Washington from the lobbyists, bureaucrats, unions, and leftists. After helping in 1980 with Reagan and 1995 as speaker I know we have to move boldly and decisively before the election results wear off and the establishment starts fighting us. That is my focus." Meanwhile, Trump told CNN he'd be "interested in vetting" John Kasich as well.

House Dems Push on Puerto Rico, Citing Zika
5 hours ago

"House Democrats are stepping up pressure on Republicans to advance legislation addressing Puerto Rico’s worsening debt crisis by issuing a report arguing that austerity cuts can’t be sustained and have made the island more vulnerable to the mosquito-borne Zika virus." Democrats on the House Natural Resources Committee released a report yesterday that argued "further sharp reductions in government spending can’t be a part of a legislative solution"—especially with a rainy season boosting the mosquito population and stressing an island health system already struggling to deal with the Zika virus.

Clapper: ISIS Can Stage Attacks in U.S.
5 hours ago

"ISIS has the capability to stage a Paris-style attack in the U.S. using local cells to strike in multiple locations and inflict dozens of casualties, according to the Obama administration's top U.S. intelligence official." Director of National Intelligence James Clapper told CNN's Peter Bergen that such a scenario is "something we worry about a lot in the United States, that they could conjure up a raid like they did in Paris or Brussels."

Trump to Name VP Search Committee
6 hours ago

"Donald J. Trump said on Wednesday that he expected to reveal his vice presidential pick sometime in July—before the Republican National Convention in Cleveland—but added that he would soon announce a committee to handle the selection process, which would include Dr. Ben Carson." He said he's inclined to name a traditional political figure, unlike himself.