In case you weren’t aware of it, the motion picture industry is getting a bailout:
A provision in the current “stimulus” bill would allow Hollywood moguls to write off half the production and filming costs of big-budget films and TV shows.
Backed by Walt Disney and the Motion Picture Association of America, the provision amounts to an estimated $246 million Hollywood tax break over 11 years.
It’s the least Democrats can do for some of their richest and most generous supporters, who gave nearly $20 million in campaign contributions to Democrats during the 2008 election cycle, according to OpenSecrets.org.
Currently, only the first $15 million of production costs can be written off – a rule aimed at keeping low-budget film-makers in the U.S.
Republicans on Capitol Hill noted that Hollywood seems like an odd choice of bailout since it appears to be the one sector of the economy unaffected by the current meltdown.
Last month alone, the industry raked in a record $1 billion in box office receipts, according to industry watchers.
Maybe, but I hear that Matt Damon has been forced to switch to domestic caviar for lunch.
You didn’t think all that money they gave to Obama was for nothing did you ?
H/T: Vodkapundit
February 3rd, 2009 at 4:45 pm
First off, I’m sure you’re well aware that $1 Billion in revenue doesn’t mean $1 Billion in profit. And trust me, since I’m in this business I know how low the margins are. What many don’t realize is that most of the money that is made off of motion pictures now are from DVD and syndication sales, not the actual theatre box office. So this isn’t like Exxon and record profits. Not in the least.
Second, entertainment is one of the US’s biggest worldwide exports. That’s right, entertainment. So giving these folks tax breaks would fall right in line with your free market philosophy, wouldn’t it?
Last, we lose a TON of business to Canada because they offer far better tax incentives than we currently do. This could bring some of that money back into the US. And that means good, high paying jobs.
And, by the way, $246 million in tax breaks over 11 years? That’s tiny when compared to the tax breaks that Republicans are proposing.
So make your spoiled celeb jokes if you must, but I wish you’d look at this a bit more carefully given the current state of the economy…especially in California where they don’t have enough revenue coming in to pay out $3.5 billion in tax refunds.
February 3rd, 2009 at 5:38 pm
Justin,
If there’s one industry in America that doesn’t need even more federal largesse, it’s film-making.
February 3rd, 2009 at 5:58 pm
I thought the Hollyweirds gave him ALL that money because they worshipped him, not because they were looking for tax favors!
Shame on them.
February 3rd, 2009 at 7:25 pm
Doug, says who?
I’m sorry, but when you say stuff like that it makes it clear you know little to nothing about this business.
Basically, the very nature of film production (go into a community, film and leave) means that it has been historically ignored for tax incentives and corporate welfare when nearly every other industry has been feeding at the trough. Meanwhile, as stated before, it’s one of our biggest exports. If there’s ONE thing that the world always wants it’s American entertainment. It’s a very unique product because it can’t be made anywhere else.
Oh well…
February 3rd, 2009 at 9:09 pm
Justin,
And you’re not getting that I reject the idea of using the tax code to subsidize industry — whether it’s in Hollywood or Silicon Valley.
Especially in case, like this, where the industry has quite obviously used campaign donations to curry favor with the Administration in power.
February 3rd, 2009 at 11:30 pm
Using the tax code to subsidize industry? What do you think the GOPers and Libretarians are arguing for when it comes to nearly every other industry? You can’t have it both ways.
And as far as currying favor, please…$20M in tax cuts a year over the course of 11 years is NOTHING. Both you and I know that. And, actually, what they’re doing is attempting to replace a similar tax break that will expire this year that had been in place since 2004.
But hey, keep on arguing that this would go towards Matt Damon’s caviar budget. It makes for a better line.
February 4th, 2009 at 5:28 am
Justin,
I don’t know about Republicans, but most libertarians I know are against using the tax code to subsidize industry.
Which is why they favor things like the flat-tax.
The only purposes taxes exist are to raise revenue.
February 14th, 2009 at 10:00 am
[...] news — that $ 246 million tax credit for Hollywood a/k/a The Brad Pitt Relief Act of 2009, which I wrote about earlier this month, was taken out of the final conference [...]