GO
Loading...

Forget income equality—this is Hollywood!

When it comes to tax cuts, I'm like the late Milton Friedman in that I'm favor of them for any reason and at any time.

But the recent arms race between New York and Los Angeles over TV and film production has me choking a bit on the unrepentant hypocrisy on display from coast to coast.

Axella/Bauer-Griffin | GC Images | Getty Images

The new liberal Democratic mayors of both those cities are jettisoning their usual "tax the rich" rhetoric in favor of continuing tax breaks for the big studios. L.A. Mayor Eric Garcetti even just called for doubling the tax subsidies for Hollywood productions in the city limits.

In New York, uber-lefty Mayor Bill de Blasio ran on a platform promising to end tax breaks for big corporations and refocus the city's efforts towards helping small businesses thrive. But that didn't stop de Blasio from strongly praising the city's existing incentive plans for big studio productions late last week.

Read MoreHollywood wants everyone except them to pair their 'fair share': Carol Roth

Both mayors have made the solid case that these businesses are essential to the economic health of their cities. Both mayors are working hard both in public and behind-the-scenes to snag everything from big movies to the upcoming Stephen Colbert-fronted "Late Show" in 2015.

But the question is: Why is this sagacious tax policy such a good idea for show business and not for everyone else? These Democratic mayors seem to realize that lower taxes and fewer regulations for the entertainment industry are good for the general economy, so how about spreading the wealth a bit?

I realize those are rhetorical questions unless you're totally politically naïve. The obvious answer is that both of these mayors know full well that tax incentives are good for their cities' jobs and economic picture, and they're simply playing favorites with the highest profile industry of all. Oh, and it doesn't hurt that it's also an industry known for its overwhelming fundraising devotion to Democrats. I mean, if you're Bill de Blasio, would you rather pose for publicity pictures with "Good Wife" star Julianna Margulies or some warehouse owner in the Meatpacking District?

Now, I'm mostly willing to give Garcetti a pass on this issue because the entertainment industry has always been the No. 1 business in Los Angeles. And putting its concerns front and center is a 75-year-old tradition there.

Read MoreOf course the 'Lego Movie' villain is named 'Lord Business!': Jake Novak

But de Blasio's case is different because his economic rhetoric is being presented as a possible new message for the Democratic Party nationwide. Some liberal pundits see his term in office as a crucial test case for a more progressive platform in the post-Obama era.

Remember, de Blasio still talks about the injustice of growing income inequality every chance he gets. And the Democrats seem to believe that this is a winning message for 2014, 2016 and beyond.

That's what makes de Blasio's policy vis-a-vis show business so important. Because the mayor is either jettisoning his beliefs in favor of his personal and political gain, or he never really believed this social justice nonsense in the first place.

The fact that it turns out the de Blasio family paid only an 8.3-percent effective tax rate for 2013 only adds fuel to this burning question.

Read MoreThe really rich don't really mind high taxes!?!

Many conservatives may want to take this opportunity to bash leftist Hollywood political cronyism once again, but a better strategy would be to talk the bigger issue of what really causes income inequality and how to fix it. It's important to have this policy debate now because the Left still seems to be doing all the talking on this issue.

Supply siders should agree with the Left that favoritism and unfair policies are the biggest contributors to income inequality and then pound this special treatment for Hollywood as a prime example. Then, the point needs to be made that the only way to really end this kind of favoritism is to completely level the playing field. That means across-the-board tax and regulatory cuts. That means no more outright subsidies. That means fewer opportunities for cronyism and special treatment.

Leave it to the Hollywood Dream Factory to finally invent a storyline where it's the right wingers in America who can finally be the standard bearers for fairness and equality.

This is commentary from Jake Novak, the supervising producer of "Street Signs." Follow him on Twitter @jakejakeny.

Contact Taxes

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    To learn more about how we use your information,
    please read our Privacy Policy.
    › Learn More