I rise to a point of personal privilege this afternoon. On Monday I did a post wherein I sort of slapped myself on the forehead at the realization (derived from a Bloomberg Politics piece by Margaret Newkirk) that Bobby Jindal’s decision to expose refundable business tax credits to desperately needed budget cuts stopped short of the state’s famously generous film and TV credit program, which also happened to benefit Duck Dynasty, the show featuring the right-wing clan whose head recently endorsed Bobby for president.
Like Newkirk, I noted that the state’s film tax credits included transferability and buyback features that made it the “corporate version of the ‘refundable tax credits’ poor people get via the EITC,” and did a bit more ranting and raving about Jindal’s budget priorities and my general hostility to state film programs. Brother Benen liked it enough that he quoted it in his own piece on Bobby’s budget decisions.
Before I even realized Steve had quoted me, we were both blasted by Daily Caller writer Peter Fricke–me for writing “demonstrably false claims” about the Louisiana film credits, and Benen for “cutting and pasting” (his term, I suppose, for quoting) said claims:
As Kilgore ought to know, “refundable” has a very specific meaning in the context of tax policy. According to the IRS, refundable tax credits are defined by their potential to reduce one’s tax liability below zero, meaning recipients are eligible to collect the full value of the credits even if that means the government owes them money on their tax bill.
The statute governing Louisiana’s film credits clearly states that, “If the tax credit allowed pursuant to this Section exceeds the amount of such taxes due for such tax period, then any unused credit may be carried forward as a credit against subsequent tax liability for a period not to exceed ten years.”
In other words, film credits cannot be used to reduce a recipient’s tax liability below zero, and therefore do not meet the definition of refundable
Fricke concluded by revealing to the world that I am managing editor for a website with “Democratic” in the title, and suggesting that Brother Benen, or maybe Rachel Maddow herself, should have noticed that before “cutting and pasting” my words. Coming from someone at the Daily Caller, an accusation of partisanship is pretty rich (a little more research might have alerted Fricke to the fact that I was also a member of JournoList, the liberal media conspiracy the DC exposed a while back!).
In any event, to cut to the tedious chase, I did not, of course, say the credits were “refundable,” but simply that by being transferable or subject to a state buyback they were functionally equivalent to refundable credits. I then engaged in a long Twitter conversation with Fricke–who was quite civil other than suggesting I was a bit of a dolt for failing to understand that the state law in question unambiguously ruled out transfers or buybacks beyond the original company’s tax liability–and he half convinced me I was wrong because he kept saying the Louisiana Revenue Commissioner had told him so.
As a matter of due diligence, I checked the next day with the “horse’s mouth,” Chris Stelly, the executive director of the subdivision of the Louisiana Department of Economic Development that actually administers the entertainment credits, and discovered I was actually 100% right: credits sold to third parties are not limited in value to the seller’s tax liability, and the state will buy back credits earned by production companies at 85 cents on the dollar even if they exceed said company’s tax liability and mail them a check for the difference (refundability in all but name). On top of that, he told me, there are two separate and more specific tax credit programs that are entirely refundable. Stelly was so nice and cooperative than I’ve very nearly changed my mind about the foul nature of state film programs!
Anyway, I relayed all this to Mr. Fricke along with a long quote from Stelly that definitively addressed the original dispute, and he’s apparently waiting to hear back from his buddies in the Louisiana Revenue Department to confirm that the agency which actually handles these programs day in and day out knows what it’s talking about. Then presumably he’ll correct his post and maybe even take back an insult or two.
Sorry to take those of you still reading at this point down this long and twisty road on a subsidiary point in a single blog post. But while high-speed news-cycle blogging does have its exposure to errors, from typos to broken links to more substantive problems, I’m lucky to not have been accused more than a very few times of heavy-duty sloppiness in the pursuit of partisan malice. So I’m glad to report to you, and to Brother Benen, that I’m not the one here who failed to understand the facts.