WSJ Slams Sweetheart Tax Break that New York Cobbled Together for NBCUniversal to Move 'Tonight Show' to NYC

When Jimmy Fallon replaces Jay Leno at NBC's The Tonight Show, the show will move back east to New York City, to be broadcast from network headquarters at 30 Rockefeller Plaza. The move makes financial sense for the network in part because the state of New York worked out a sweetheart tax deal for NBCUniversal to execute such a move.

In essence, the long suffering taxpayers of New York State will take a hit because their state's politicians create a tax break which seems designed explicitly to both relocate the Tonight Show and the variety show America's Got Talent, which will be moving its production from New Jersey. From today's Wall Street Journal editorial, "A Tax Break for the 0.01%":

Empire State Governor Andrew Cuomo and the legislature have helped to grease the show's eastward move with a special new tax credit available only to big-budget television programs that relocate to New York. According to the state's new budget the credit is aimed at "a television production that is a talk or variety program that filmed at least five seasons outside the state prior to its first relocated season." Oh, and the show has to be filmed in front of a studio audience of 200 or more and spend at least $30 million in annual production costs in New York. How's that for a very specific special interest?

Now comes word from the New York Daily News that the NBC program "America's Got Talent" will also be crossing the Hudson River from its current production facility in New Jersey to exploit the tax credit. This means that the show's star, pauper Howard Stern, can now perform the vital public service of critiquing aspiring entertainers without having to travel too far from the Manhattan studio where he hosts a satellite radio show. All of America is relieved that Mr. Stern's limo driver no longer has to make the dread cross-Hudson trek.

A bit further north, Mr. Cuomo and the state legislators who created this tax carve-out inhabit New York's capital of Albany, a kind of King's Landing without the charm. And they seem not the least embarrassed to be handing out gifts to the top 0.01% of U.S. income earners while maintaining for the rest of the working stiffs the nation's absolute worst business-tax climate, according to the Tax Foundation's annual ranking for 2013.

We haven't been able to get a precise estimate of the cost of this Fallon-Stern tax credit, but you can assume it's at least several million dollars. Congratulations to the NBC lobbyist who pulled off this heist; no doubt he will be richly rewarded come bonus time.

As for the other taxpayers of New York, you'll have to console yourselves with waiting in line to see Mr. Fallon, if you can get a ticket. We doubt it's tax deductible.

NBC Wall Street Journal