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.