Jindal Passes Tax Breaks for Game Devs, Nobody Cares
Posted by Dan on July 10, 2009GamePolitics is reporting on an AP story that Louisiana governor (and often cited potential Presidential candidate in 2012) Bobby Jindal has signed into law tax breaks to, among others, game development studios to try and bolster production in the state. The action has received praise from the ESA.
Here’s why you shouldn’t care: Bobby Jindal is the governor of Louisiana, and his tax breaks will only affect Louisiana. Not California, not New York, not any other state in the union. Louisiana. Now, you may be thinking “so what, he’s trying to attract an industry into Louisiana.” Problem is, that’s not going to happen.
Louisiana is different than most every other state in the union, because their state legal system has not updated itself to anything remotely resembling the 21st century. Louisiana is the sole state in the union that follows the “civil law” legal system, rather than the traditional common law. The problem with this form of law, is that while common law provides a certain amount of precedent, which can be researched and relied upon, the civil law system is relatively uncertain. It relies upon judges interpreting what the law should be. The difference is most marked in the area of estate law and succession, and to be fair the gap has narrowed with the Uniform Commercial Code. But game developers working in Louisiana have to abide by its law. They’re going to live there, and be subject to its tort laws when they get in a wreck going to work. They’re going to be subject to its estate law when they make a will, or (god forbid) pass away. They’re going to face the state’s antiquated legal system day in and day out, and that is a MAJOR turnoff for attracting skilled developers. Nobody wants to work in a state where you can’t tell what the law is in advance. The secondary issues like the abject poverty surrounding much of the state, inequality in education, jobs, and healthcare, and the blindingly deep corruption reaching nearly every level of the state’s government certainly can’t help.
So, while Bobby Jindal’s announcement is all fine and dandy, it’s a non-starter.
Popularity: 6% [?]
The question is, how many people take the legal system into account when they move?
Yes LA’s system sucks fro ma legal stand point, but someone who gets a job offer that increases their pay may not even care.
Not really defending LA here as anything that makes other states look bad while I am trying to get incentives past in Oklahoma is fine and dandy in my opinion.
Thing is, they do though. For instance, I am very hesitant to move to California because I will not be able to bring 90% of my firearms with me; it was a big concern when moving to D.C. as well. If I were to move to New York, I’d be concerned about being bound by a different set of ethical guidelines than in other states. I might be enticed to move to Arizona if I had a terminal illness due to the lack of state estate tax. Massachusetts developers are in luck: the state recently cut their estate tax massively. Lots of people move to Florida because they have zero state income tax. What is the point of making more pay in Louisiana if you’re getting it all taxed away?
No-fault divorces (NY doesn’t have them, last I checked), insurance standards, taxation issues, gay marriage, quality of schools, etc. These are things that people DO care about when they choose where to live and work, and they may well be worth it to counteract a job offer that increases their pay.
Of course, that’s ignoring the fact that due to the lower COL in Louisiana, you can bet on developers paying FAR less to their employees than they did in California or other locations. For budget conscious and savvy individuals, this is a huge minus; especially in a poverty ridden state like Louisiana.
The fastest way to get companies to invest in your state is tax breaks. It work for all industries. It is basic economic 101.
CA is bankrupted and more companies have move to the South because these states have low taxes and are hostile to unions. In other words they are pro businesses.
For what it’s worth, I thought I would point out a couple of misconceptions in your blog, as well as the fact that I was pretty offended.
Your understanding of the Louisiana legal system appears pretty limited. While, yes, Louisiana has a civil law system, as a practical matter, it is treated by every state judge and attorney as common law, with the exception of a few significant land mines which outsider attorneys occasionally blunder into (particularly in the laws of property, contracts, and succession) Obviously, federal laws and federal courts will involve even less civil law.
Had you consulted any practicing Louisiana attorney, you would be given much the same answer. The Slate article upon which you rely is predictably slanted given Randy’s input — he is purely a civil law specialist and relishes our civil law history, which is now more theoretical than practical.
As for the reference to our “antiquated legal system”, you do realize that the vast majority of the world exists under Civil Law Systems – and not just theoretical ones? While the U.K, U.S., Canada and Australia have common law, the rest of the world have civil law, barring those with Shariah courts. Somehow West and East Europe, South America, Central America, and most of Africa and Asia manage to get by. As a result, our “antiquated legal system” provides one of the strongest backgrounds for practice in international law, as most graduates get degrees in both civil law AND common law.
I can’t argue about our state’s long history of corruption, but can point out that our income taxes here are relatively low, along with property taxes, and lower cost of living. I can also point out that claims of abject poverty throughout the state are simply gross exaggeration. There is poverty here, as there is in every state. There is also wealth. Our educational system is hopefully moving in the right direction, as many changes were enacted post-Katrina, but there is a lot of ground to make up there.
As for the cuts themselves, I applaud them. Your blithe assertion that this won’t attract an industry to Louisiana seems naive. While I certainly can’t see the future, similar legislation did pull millions of film industry dollars into the state when enacted years ago, drastically increasing the amount of in-state filming and post-production over the last several years, including well-known, well-funded movies such as Benjamin Button and the current True Blood series.
The new business-friendly regulations in Louisiana seem to be a step in the right direction, as it was our state’s constant habit of levying new taxes on business that drove them out in the 80’s and 90’s, including driving the petrochemical industry from New Orleans to Houston.
For what it’s worth, I am admitted to the LA bar and admitted to practice before the USPTO.
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