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Tax Breaks For Venues Presenting Live Music

Jeff Bonny

Jeff Bonny

Inactive
Nov 20, 2000
6,852
4,585
Vancouver BC
#1
Anyone who lives in the Vancouver area will tell you the live music scene here isn't especially healthy. Last night on a break at a $50 pub gig the subject of what could be done to stimulate the music scene arose. We all agreed that better musicians attract audiences better and better pay attracts better musicians. We also agreed that times are tough and many venues don't have the means to develop the customer base that makes live entertainment financially worthwhile. A couple of the guys had obviously been thinking about this and came up with the idea of tax breaks from the city for venues hosting live music that would allow a larger budget to present live music.

The city of New Westminster, BC was once a front runner for the provincial capital and the main drag Columbia St has a very cool turn of the century vibe. The city is in decline though being between Vancouver and the suburbs and a big question being raised is, "how can we get people to stop here?" The place seems ripe for this kind of tactic.

Thoughts?
 
#3
placedesjardins said:
There is no benefit for the government to do that. And if restaurants aren't doing well, they would probably pocket the difference from a tax break rather than spend the money to hire musicians and bands.
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How is the increased traffic live music creates of no benefit to a city centre that's suffering from a severe decrease in traffic?
And a business only gets the break if it actually presents live music...there's no "pocketing the difference".
 
#4
jeffbonny said:
How is the increased traffic live music creates of no benefit to a city centre that's suffering from a severe decrease in traffic?
And a business only gets the break if it actually presents live music...there's no "pocketing the difference".
Click to expand...

A large portion of the population in the US would consider that to be meddling in the free market. They would say the market has decided in favor of DJ's and free giggers. I can almost see the attack ads on TV now. I don't think it would work.
 
#5
notverygood said:
A large portion of the population in the US would consider that to be meddling in the free market. They would say the market has decided in favor of DJ's and free giggers. I can almost see the attack ads on TV now. I don't think it would work.
Click to expand...

That's idle speculation. Any citizen of a Western democracy who'd consider it meddling would be a prize hypocrite. Individuals, companies and various layers of government lobby for and accept tax credits of all kinds all the time...it's beyond commonplace. And it's not like there are a lot of DJ's and freeby-ers in New Westminster (which by the by is in Canada not the US). There's actually a long history of venues offering live entertainment here. Our basic premise is to make it more affordable for these venues to hire better players more regularly and increase the pulse rate of the scene. The city funds music in the park and street festivals so it's not like they're unwilling to spend to promote the benefits of having live bands working in the community.

I don't think it's an original idea at all but I was probably being overly optimistic hoping to hear from someone who'd actually tried going for this kind of tax credit. What I did expect to hear were some good arguments against it. We've been playing devil's advocate and thinking of all the reasons why it won't fly. Any well thought out arguments against it would be pretty useful to us before we talk to a city councilor and eventually bring it before council.
 
#6
As I understand it , publishing rights were originally invented to give creators a monetary reason to pursue and develop their craft , because working a day job kills development .
[I've always worked a day job so please don't chastise]

We need to find a way to apply this hammer to the working stiff cover band et al pittance earner like you suggest.
 
#8
I'm not sure you'd achieve your aim there, welcomebackjeffbonny. By way of example, take a look at the Link Removed campaign here in NYC. Back in the 80s and 90s, when clubs charged you a $10 or $20 cover charge, part of that was actually NYS/NYC sales tax. The AF of M came to the clubowners and said, look this is essentially just a music charge, you're not really "selling" anything. So why don't we, together, lobby the state legislature to drop the sales tax on this, the clubs don't have to do ANYTHING and keep charging the same cover charge, and the money that used to go to sales tax (at the time 8.25% or $1.65 on a $20 cover) can go to an annuity fund that is earmarked for the care of elderly jazz musicians who can no longer play to support themselves and have no other safety net.
And the clubs said Sure, great idea. And so the sales tax got lifted and guess how much of that former tax money got put aside? Zero.
So sure, tax credits. But is the club or restaurant owner going to use that break (and the resultant cash flow from NOT having to pay that bill) to put that money into the pocket of better musicians than they have been hiring (hey, I don't have to hire Ed Fuqua, I can hire Wayne Shorter with these savings!). You tell me. My experience is that the bulk of this cash is going to go into THEIR pocket and they will make the least, meanest, most miniscule outlay to hire "live music" that they can get away with. And then whine about how the program "isn't living up to expectations". I think a far better use of government arts money is in direct funding of performance spaces, arts organizations, and artists themselves. If you've got a performance space that is receiving funds to subsidize operational expenses, promotional arts organizations that are receiving funds to arrange festivals, workshops and individual performances and artists who are receiving funds to underwrite travel expenses, subsidize performance fees offered by arts promotional organizations and so on, THEN all the other businesses (restaurants, hotels, shops, etc) can benefit and grow.
Once that neighborhood or downtown has become a hub for arts activity, then you might see local restaurant and club owners actively vie for those patrons by hiring "better musicians" who can demand "better pay".
 
#9
jeffbonny said:
That's idle speculation. Any citizen of a Western democracy who'd consider it meddling would be a prize hypocrite. Individuals, companies and various layers of government lobby for and accept tax credits of all kinds all the time...it's beyond commonplace. And it's not like there are a lot of DJ's and freeby-ers in New Westminster (which by the by is in Canada not the US). There's actually a long history of venues offering live entertainment here. Our basic premise is to make it more affordable for these venues to hire better players more regularly and increase the pulse rate of the scene. The city funds music in the park and street festivals so it's not like they're unwilling to spend to promote the benefits of having live bands working in the community.

I don't think it's an original idea at all but I was probably being overly optimistic hoping to hear from someone who'd actually tried going for this kind of tax credit. What I did expect to hear were some good arguments against it. We've been playing devil's advocate and thinking of all the reasons why it won't fly. Any well thought out arguments against it would be pretty useful to us before we talk to a city councilor and eventually bring it before council.
Click to expand...

That's not idle speculation. I've watched at least 5 political ads just tonight attacking pork projects, tax breaks for different groups, etc. There is simply no demand for tax breaks for music here. We won't even fund our schools music programs. I can tell you exactly what the ads will say as I've just watched one:

"John Smith says he is for responsible spending but his washington record says otherwise. He voted for expensive taxs breaks for bar owners while thousands were out of work"
"John Smith. Just another politician and bad for (insert state here). Paid for by stick in the mudd PAC.

There is no shortage of prize hypocites here. I really wish an idea like this would work. But it would be abused even if somehow someone could get it passed.
 
#10
notverygood said:
A large portion of the population in the US would consider that to be meddling in the free market. They would say the market has decided in favor of DJ's and free giggers. I can almost see the attack ads on TV now. I don't think it would work.
Click to expand...

I am part of this population. Why subsidy a business that might bring in an extra $10,000 that year and provide no tangible benefit when you could subsidy crops or automobiles or education? Furthermore, your band should develop the kind of following to have negotiating power and make more money. Until then it's just a false feeling of entitlement.
 
#11
I have a feeling this is going to reveal a large Canada / U.S. divide on this issue. There are massive tax incentives in the movie business in Canada, and the music business has its share too, though not so much on the live performance end as far as I am aware. I believe that if you approach running a venue as a non-profit organization though, there might be ways to do it. I don't know about B.C., but there is a longstanding well-known venue in Winnipeg that brings in world-class acts, which is a non-profit and competes directly with for-profit private businesses. I don't know much of the particulars beyond that, to tell you the truth, but it certainly can be done.
 
#12
oniman7 said:
I am part of this population. Why subsidy a business that might bring in an extra $10,000 that year and provide no tangible benefit when you could subsidy crops or automobiles or education? Furthermore, your band should develop the kind of following to have negotiating power and make more money. Until then it's just a false feeling of entitlement.
Click to expand...

I agree.
 
#13
I ended up speaking to a city councilor at a city sponsored festival last week and not surprisingly he echoed some of the specifics maestroedfuqua talked about. What he did find interesting was the idea of a tax rebate on actual money spent on live music. While he didn't think it would ever pass council he encouraged me to bring it forward to keep them thinking about idea of facilitating live music.

One thing to make perfectly clear this isn't about me getting a gig. It's about growing a scene. It's going to be hard for a lot of you to understand how little the Vancouver area cares not just for its musicians but its artists in general. This isn't a matter as notverygood suggested of promoting a band and developing a following to increase negotiating power. Notwithstanding that I'm a career sideman and don't really have "a band" to promote it's a fact no one can fight for gigs that don't exist. I guess you really have to have spent time here to understand how shameful a situation has evolved in the last fifteen years or so.

The observation Canada has a well established history of tax incentives foreign to the American psyche is astute. We also pay much higher taxes.
 
#14
jeffbonny said:
... I guess you really have to have spent time here to understand how shameful a situation has evolved in the last fifteen years or so...
Click to expand...
Of course, you hear about the active music scenes in various cities on this forum. Cities even smaller than Vancouver with more live music opportunities. But, there are a lot of towns and cities in the US that have a dead music scene. So, that's that.
 
#17
Another thought - Most bar owners judge bands by the money in the till at the end of the night, not by their musical talent. We all know talented musicians who can't make a living playing music because they lack stage presence. Customers go to bars to drink, dance and have a good time, not to sit in awe of the newest guitar wizard.
 
#19
All in all I think the kind of local tax credits I was envisioning are a dumb idea. If not dumb then impractical. To answer some of the more cynical of you there was never a sense of entitlement only a genuine desire to help revitalize a declining scene that in its better days gave venue to people like Rene Rosnes and Colin James among many others. I don't really care who gets the gigs as long as there are gigs to get.

I probably need to open a venue. Maybe a straight for profit business or maybe one run by a non-profit society. The Vancouver Jazz and Blues Society has promoted some great music over the decades but has never consistently done anything long term in a single house. This is an incredibly daunting proposition. I wish I didn't love this place so much. It'd be a helluva lot easier just to move to New York and continue to let it be someone else's problem.
 
#20
jeffbonny said:
Anyone who lives in the Vancouver area will tell you the live music scene here isn't especially healthy. Last night on a break at a $50 pub gig the subject of what could be done to stimulate the music scene arose. We all agreed that better musicians attract audiences better and better pay attracts better musicians. We also agreed that times are tough and many venues don't have the means to develop the customer base that makes live entertainment financially worthwhile. A couple of the guys had obviously been thinking about this and came up with the idea of tax breaks from the city for venues hosting live music that would allow a larger budget to present live music.

The city of New Westminster, BC was once a front runner for the provincial capital and the main drag Columbia St has a very cool turn of the century vibe. The city is in decline though being between Vancouver and the suburbs and a big question being raised is, "how can we get people to stop here?" The place seems ripe for this kind of tactic.

Thoughts?
Click to expand...

If a venue owner pays a band without the band being able to justify their own existence, they won't be in business very long. The venue pays the band from the money taken at the door, right? The additional people will, in theory, buy food and/or drinks and the larger crowd will spend more than what the venue would take in on a night with no band, right? Even if the cover charge is a small amount, the band should be able to get more than $50 per member (unless it's a large band). A business has to make it on their own. If they can't, another business owner is waiting in the wings for their shot at that location.

Why does the government have to fork over money to a business that should be able to make their own way in life? How would they justify that to the taxpayers? Businesses have to be allowed to fail. It's part of a free market economy and amounts to 'survival of the fittest'.

A better way to increase the music scene would be to hold festivals with paid attendance, food and beverages. If the city has a number of parks in varying sizes, they can spread it out and use mass transit to shuttle people from one place to another. Milwaukee has Summerfest and it's the largest music festival in the world. 10 days of music from all over. Local restaurants are represented and they move some in or out, depending on how preferences change. We had under 900K people go through the gates this year, partially because it was really hot but it's always successful. They also have several contests to see which new talent will get to play on some of the stages, too. The musicians are seen/heard by people who may never have heard of them, if they like the bands, they will remember and the bands are able to sell their CDs & other swag with the festival getting a chunk of the sales.
 

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