Corporate Welfare Main Topic

38 Studios documents show why should not subsidize video game companies

The recent unsealing of court documents concerning Rhode Island’s loan guarantee of Curt Schilling’s video game company, 38 Studios, remind us how much we need to oppose H.2487 and H.2606. Rhode Island lost $75 million in that deal. H.2487 and H.2606 are before the Massachusetts legislature now. They would provide tax credits to Massachusetts video game companies as high as to 25% of their operating costs.

Our own calculations indicate that Massachusetts could be giving away $50 million every year in tax payer money to video games companies. Over ten years, the cost would be at least half a billion dollars. What government services will we need to cut over the next ten years to balance this $500 million dollar subsidy?

Under H.2487, video game companies must incur a minimum of $50,000 in qualified expenses during a consecutive twelve-month qualification period. An entrepreneur working part-time in her garage is unlikely to take advantage of this tax credit. Rather, large established game companies will benefit the most from it further increasing Massachusetts’ already high income inequality.

Rhode Island lost $75 million backing video game developer 38 Studios. If H.2487 passes, Massachusetts tax payers could lose that amount every year and a half.

Massachusetts has a vibrant software industry that has fostered hundreds of companies. This industry was built without the benefit of tax credits from Massachusetts tax payers. The video game industry does not need special treatment and it certainly doesn’t need to be subsidized $500 million over the next ten years.

H.2487 and H.2606 are before the Joint Committee on Revenue. If they cannot get out of committee, they are dead.

Contact Senate Committee Chair Michael J. Rodrigues and House Committee Chair Jay R. Kaufman and urge them to oppose this bill today. Their contact info is below.


Michael J. Rodrigues Senator
Phone: 617-722-1114
Fax: 617-722-1498

Jay R. Kaufman Representative
Phone: 617-722-2320
Fax: 617-722-2415

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