We're constantly told that taxes don't matter to business and investors, but listen to that noted supply-side economist, Alec Baldwin. The actor recently rebuked New York Governor David Paterson for threatening to try to help close the state's $7 billion budget deficit by canceling a 35% tax credit for films shot in the Big Apple.

"I'm telling you right now," Mr. Baldwin declared, "if these tax breaks are not reinstated into the budget, film production in this town is going to collapse, and television is going to collapse and it's all going to go to California." Well, well. Apparently taxes do matter, at least when it comes to filming "30 Rock" in Manhattan.

Believe it or not, Mr. Baldwin's views are shared across the movie industry, which is pleading in state capitals across the country for most-favored-tax status. Hollywood productions are highly mobile and can film just about anywhere. So they have taken to shopping around the country -- and the world -- for the most lucrative tax avoidance deal.

According to the Motion Picture Association of America, nearly 40 states have corporate tax carve outs or generous cash rebates to lure movie studios to their states. In Michigan, producers negotiated a 40% tax credit on their production costs. A bipartisan bill introduced in the Texas legislature last week and supported by Governor Rick Perry would allocate $60 million into the Texas Film Incentive Program. Members of the Screen Actors Guild held a rally last week in front of the state capitol urging the tax breaks.

In some cases these state tax credits exceed a company's tax liabilities, which means that Disney, Dreamworks and others can get a net cash subsidy from state taxpayers. "In many states, today, movie producers actually pay a negative tax," says a Tax Foundation report on the subject.