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Los Angeles is still the film capital of the world. More and more productions might be fleeing for cheaper pastures, but on the whole, Southern California still gets more film shoots than anywhere else. That being said, the number is getting smaller by the year, and those inside the industry are starting to stand up and fight. In that spirit, the State of California is considering passage of a much bulkier incentives package, but if some members of the visual effects community have their way, the federal government will actually do the exact opposite.
Instead of fighting incentives with incentives, members of the Association of Digital Artists, Professionals and Technicians want the federal government to impose tariffs on VFX work in an effort to stop more jobs from fleeing to Canada, particularly Vancouver. In theory, that would make the cheaper labor Canada is able to offer every bit as expensive as American work, even with the tax incentives. At a glance, it sounds like a really good plan, but unfortunately, it’s littered with quite a few problems, both real and theoretical, the most important of which is whether effects work is even a product.
Right now, the MPAA and conventional wisdom argue that VFX and post production work is a service. Think of it like walking someone’s dog or housesitting. As such, if it happens in Canada, it’s taxed in Canada and has nothing to do with the United States, even if that special effects work is eventually digitally transmitted back to the United States. According to Variety, many in the VFX industry would like to see their work defined as a product. That would make its transfer from Canada to the United States something that could be subjected to a tariff.
Let’s say, in theory, they win that battle. The climb is still an uphill one, however. Contrary to what you may think, the United States does impose tariffs on a whole lot of goods. Trade might be mostly free, but it’s not completely free. We tax the living hell out of peanuts and shoes coming into the country, for example. But trade agreements between different countries are still like a game of Jenga. When one country ads a tax, another typically follows suit. As a result, it’s an extremely delicate game, and it’s probably not one the US Government wants to play over post production film jobs.
Still, it’s an interesting take on a growing problem, and if nothing else, it’s a giant reminder that the film industry is broken in Los Angeles. The porn community has packed up and moved along. TV dramas are bolting, and now, post production is wandering off too.