The movie industry in America has long been heralded as the pinnacle of cinema every country seeks to emulate. Hollywood rakes in billions of dollars every year, coming from various sources, including TV rights, movie tickets, and movie sales, with endorsements and sponsors to boot.

The state of New Mexico was fast becoming a movie hub in the United States after subsidies were offered, and it had the honor to host one of the greatest TV shows of all time, 'Breaking Bad,' according to critics. The revenue and fanfare generated due to its production and the spinoffs brought a lot of money and jobs to the state.

This is the heart of the debate. Tax rebates encouraged big spenders to produce big-budget movies, which equaled a lot of outsourcing, creating many jobs. 

Former Governor of New Mexico Susan Martinez, a Republican, signed a $50M cap on tax rebates, which scorned the movie-making scene in the state. It was long debated and argued that the $50M cap was too little, and more needed to be done. Current Governor Lujan Grisham signed a $110M rebate cap, which analysts projected would take the state's movie production scene to the next level.

Understanding how tax rebates work is essential in understanding why they work and should be implemented. A tax rebate means the government will provide a refund or reimbursement for paying too much tax. Many Americans get tax rebates depending on how their taxes are filed, their line of work, and their income. 

When a Hollywood studio plans to make a movie, in-house analysts and forecasters predict how much will be spent and how much will be reimbursed to them.

Generally, the more that is earned and spent, the more taxes are paid. Tax rebates made it cheaper for movies to make big-budget movies by reimbursing them part of what was spent in making the movie, hence, a tax rebate. 

When there was a $50M cap, it meant that when $50M was spent on a movie, the government reimbursed a certain amount of money when taxes were filed, the same being true at the $110M cap. This meant producers were incentivized to spend more on movies, creating jobs.

This incentive had other benefits. Online streaming platform behemoth, Netflix, agreed to purchase Albuquerque studios for $30M, establishing New Mexico as a movie-making hub, giving Hollywood giants like Los Angeles and New York a run for their money. 

The purchase of the Albuquerque Studios entailed a $1B spending promise on production over ten years. The large amount of wealth generated will dramatically boost the economy, creating thousands, even millions, of jobs in the state in the long run.

A study showed that over 15,000 full-time jobs were created within four years. It also found that the state of New Mexico accrued $180M directly from movie spending each year, with average yearly salaries in the jobs created around $70,000. The ripple effect this had on the economy is not to be understated.

Tax subsidies on the film industry are critical to its growth as they incentivized movie makers to film in the state and generated wealth that favored everyone.