Embedded In The Fiscal Cliff Deal: Hollywood Gets A Big Tax Break

from the how nice dept

Last month, we wrote about some of the more ridiculous subsidies that Hollywood studios get these days, in which approximately $1.5 billion in taxpayer money goes straight to Hollywood studios in the US (and even more internationally). While the reasoning given for most of these programs is that they create jobs, a thorough study of the various programs showed that almost never happens. Of course, most of those programs have been state subsidies. The federal government also has its own subsidies for Hollywood — and they just got renewed in the fiscal cliff deal, despite being scheduled to expire.

It’s one of the head scratchers that some noted would take people by surprise given all of the talk about the “fiscal cliff.” Here’s what it looks like:




Like many such things, this started out with good intentions, with the idea being to help small, independent films stay in the US. But that changed:


The original tax incentive applied to productions costing less than $15 million to make ($20 million in low-income areas). The 2008 extension applies to all films, up to a deduction of $15 million (or $20 million in low-income areas). The incentive is especially generous to television series; it applies to each TV episode.

Apparently, this sucker costs the American taxpayer about $150 million per year. As that link notes, “Disney’s Gotta Eat.” Yes, this was just one of many such “pork” efforts slipped into the fiscal cliff deal — along with things like providing Goldman Sachs subsidies for its headquarters, special breaks for NASCAR, tax benefits for Puerto Rican Rum, and more — so perhaps it’s not that surprising. But, it’s stories like this that explain why so few people trust Congress, and why they’re fed up with “crony capitalism.”

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Comments on “Embedded In The Fiscal Cliff Deal: Hollywood Gets A Big Tax Break”

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89 Comments
Mr. Applegatesays:

Re: Re:

Dear Hollywood,

Thanks, but I would rather pay for the stuff I do want than be forced to pay for the CRAP you produce year over year. If we are lucky we get one or two decent films a year.

So here is a novel approach, why don’t you pay your own way you f-ing leeches! After all, I am expected to pay my own way (with less than a 6 figure income).

Sincerely,
U.S. Tax Payors

Anonymoussays:

Re: Re: Re: Re:

Dear Hollywood,

Thanks, but I would rather pay for the stuff I do want than be forced to pay for the CRAP you produce year over year. If we are lucky we get one or two decent films a year.

So here is a novel approach, why don’t you pay your own way you f-ing leeches! After all, I am expected to pay my own way (with less than a 6 figure income).

Sincerely,
U.S. Tax Payors

Speaking of leeches, the tech sector has all kinds of benefits lavished upon it at the expense of U.S. tax payers. And those subsidies make Hollywood’s look like pocket change. Hope you haven’t used up all of your contrived outrage.

http://www.americanprogress.org/wp-content/uploads/issues/2012/01/pdf/corporate_r_and_d.pdf

Mr. Applegatesays:

Re: Re: Re: Re: Re: Re:

Oh, believe me, there is nothing contrived about my outrage. I have plenty to go around, especially when it comes to government handouts.

The government spends nearly 30% more than it takes in, more than 40 cents out of every dollar is to pay interest on the debt and they refuse to get the federal fiscal house in order. I wonder how long I could get away with that.

gorehoundsays:

Re: Re:

F#cking MAFIAA gets a special Tax Deal in that stupid Manufactured Fiscal Cliff that will end up Costing American Taxpayers over $150 Million Dollars per year.We must Boycott all MAFIAA Content.F#cking Copyright Maximalist A-Holes that suck Money from our Taxes and Suck Freedoms around the World.

Copying The Hobbit as I won’t pay a dime to see it.Just part of the money you steal from us and the Freedoms we are losing because of you.
Taxpaying US Citizen to MAFIAA !!!

art guerrillasays:

Re: Re: Re: Re: Re: Re:

not only that, but shit times 3 ! ! !

really: THREE overlong movies for what was a relatively simple children’s story ? ? ? IF the hobbit ‘required’ 3 movies (which it doesn’t), then LOTR should have been 12 movies… (i would have been okay with that…)

i loved the hobbit/book, but the movie is ridiculous…
doubt i’ll bother with ripoffs 2 & 3…

would have made ONE great movie, too bad it ‘had to’ be serialized for no good reason other than milking more money from the sheeple…

i think a LOT less of the producer/director, now…

art guerrilla
aka ann archy
eof

Disgustedsays:

Our Wonderful Gummint

Let’s step back a bit and look at a few things.

Federal Oath Of Office –

“The current oath was enacted in 1884:

I do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter: So help me God.”

Each and every one of our esteemed congresscritters, and the members of the Executive branch, are blatantly violating their oaths of office. In most cases, they are also violating the duties of their offices. They are sworn to uphold and protect the Constitution. Instead, they are attacking it at every turn.

They are sworn to “well and faithfully discharge the duties of the office on which I am about to enter”. Instead, they ignore or directly violate those duties with impunity. They seem to regard Federal service as license to print money, curry favor with the rich and powerful, and directly ignore the reason they were elected or appointed.

Somebody needs to grab them by the scruff of the neck and shake them up a little. Some prison time wouldn’t hurt.

I don’t know, yet, what to do about it. They’re pretty deeply entrenched. But there must be an answer somewhere.

Mr. Applegatesays:

Re: Re: Our Wonderful Gummint

“I don’t know, yet, what to do about it. They’re pretty deeply entrenched. But there must be an answer somewhere.”

The answer is really quite simple.

1. Throw them out of office.

2. Elect new officials with ‘no experience’.

3. Goto step 1.

Unfortunately, most districts are rigged so that elected officials never have to worry about number 1 actually happening. Add to that most people have the “my representative is fine, it’s all the other representatives that are the problem” syndrome, and the US is headed down the path of self destruction.

I have already committed to do my part. I will NEVER vote for an incumbent of any federal office. They are all totally corrupted after 4 years of service anyway.

If the above fails I think this great nation took the needed steps about 238 years ago. Might be time for a similar action yet again!

out_of_the_bluesays:

Umm, could you EVER mention the 25 or so TRILLION of guarantees Wall Street got?

Backing their speculation in paper? On top of the $700 billion directly for bail-out? — No, because you favor Wall Street and its sheer grifting on labor. At least we might get entertainment from Hollywood.

Take a loopy tour of Techdirt.com! You always end up at same place!
http://techdirt.com/
Mutual Admiration Society posts every Sunday! Awards for Most Vulgar Ad Hom!

PaulTsays:

Re: Re: Re: Re: Umm, could you EVER mention the 25 or so TRILLION of guarantees Wall Street got?

“Wall street is not relevant to the issues this site is about so why would you expect it to be brought up?”

He can’t find a way to attack Mike personally or to attack the article itself, so he has to deflect. Admitting he’s right, or merely shutting the hell up are beyond his capabilities.

davnelsays:

Re: Re: Umm, could you EVER mention the 25 or so TRILLION of guarantees Wall Street got?

I’m not sure what you’re smoking, or how long you’ve been hung over, but Mike and company have repeatedly and vociferously damned Wall Street since 2008 for their actions and Washington for their apparent disregard for the taxpayer in bailing Wall Street out. Wake up, dude!

Mr. Applegatesays:

Re: Re: Re: Re: How did the President escape blame?

In theory this is true. The president has the bully pulpit but the congress has the duty to act.

However, you may have noticed that as congress has become more reticent and mired in partisan squabbling the executive branch as seized power and taken much more frequently to action by Executive Order.

Neither, congress nor the (current or in fact any living past) occupant of the oval office seem to give one rats ass about the constitution or the rule of law. They just want to get away with as much as they can. It is truly sad to watch what was once the number one nation worldwide slip down the toilet, flushed by our own leaders who seem oblivious to the fact that there is even an issue.

John Fendersonsays:

Re: Re: Re: Re: Re: Re: How did the President escape blame?

However, you may have noticed that as congress has become more reticent and mired in partisan squabbling the executive branch as seized power and taken much more frequently to action by Executive Order.

This is not such a case. In general, the president can only do so much with executive orders anyway. The president cannot make new laws through executive orders, for example.

Whatever power-seizing has taken place is still with congressional approval. It’s not so much power-seizing as it is power-abdicating. In the end, it’s still Congress’s responsibility and Congress gets the blame.

Neither, congress nor the (current or in fact any living past) occupant of the oval office seem to give one rats ass about the constitution or the rule of law.

There’s a strong strain of truth there, but that’s as it has always been. The real problem has been the breakdown of the separation of powers. This has come about because of the defacto takeover of government by large corporate interests.

But we can’t fix any of that without holding people responsible for what they’re supposed to be doing, whether they’re doing it or not. Congress writes and approves laws. Congress gets the blame or credit for any and all laws that are passed.

Mr. Applegatesays:

Re: Re: Re:2 Re: Re: Re: Re: How did the President escape blame?

I don’t disagree with what you are saying about who is ultimately responsible. Ultimately it is the responsibility of the congress.

However, I think if you look at the history of orders coming from the office of the president over the last 40 years, you will see that more and more things that should be decided by legislation are allowed to be decreed by EO.

Nature abhors a vacuum, and since congress is, in most cases, incapable of action these days the president (and to some degree the courts) step in to fill the void left by the inaction of congress.

I say throw them all out. In fact I do more than say it, in fact I voted for no incumbents in the last federal elections and only 1 in the prior federal election. However, that will make little difference since something like 75% of the districts are rigged so that it is virtually impossible for the incumbent to lose. Therefore the incumbent has nothing to fear from the constituents they are supposed to serve.

Add to that that most people vote how they are told to either by the unions or the church and well, there you are.

There really isn’t any way to hold them responsible. They are very well insulated from the people they are supposed to serve.

DCX2says:

Re: Re: How did the President escape blame?

Congress writes laws. The President signs them. That is why Congress is being blamed.

Regardless of what Obama wants or pushes for, it is Congress that writes the bills, end of story. This is just like Obamacare, why do they call it that when it was written by Sen. Max Baucus (or rather, Elizabeth Fowler, one of his aides)

It’s also why I got a great big kick out of Rep. Boehner passing the buck to Mr. Obama over the Fiscal Cliff. The members of the House of Representatives and the Senate are the legislature and they are supposed to write laws, not the members of the executive.

Anonymoussays:

as per usual, those with plenty get to keep it or increase what they have, whilst those with next to fuck all have even more taken from them! this is typical capitalist society shenanigans to ensure there is a return to the ‘have and have not’ system of decades ago! even if this ‘deal’ had not been sorted, does anyone think that the ‘massive tax increases’ that would have been brought in would have affected anyone other than the poorest of people?

Well “anonymous coward”, with all due respect yes the poor suffer but the independent middle class suffers as well. The ironic thing is all these government programs are meant to bring the poorest among us up, but it really just creates more poverty. At least low income earners can qualify for government assistance programs in healthcare, education, housing, food stamps, utilities subsidies, even government assisted cell phone plans. But what about the middle class family that barely gets by but now, due to higher costs of everything, can’t anymore?

They’re too “rich” to receive aid but too poor for anything in life to be easy.
Despite working endlessly, doing everything the “right” way, their story is little told.

Anonymoussays:

Re: Re: Re: Re:

“You don’t die by being at the bottom, but hitting it from above can have that effect!”
-Anonymous Coward

Middle class moving into poverty is more likely to die from the consequences, than people living in it. It is the new black here and I must admit that it does cover a pretty good range of issues and the reasoning seems pretty sound!

Keep the rich from loosing money and you can finance your emperial dreams. Keep the middle class people from falling and you are more likely to avoid a revolution. Keep the poor from dieing to gain international prestige!

That is political ideology today. When money are tight it is pretty obvious where you turn… Nasty, but pretty true.

Confusedsays:

Even more confused

How does a society that elects representatives that do not actually represent continue?

Why is everyone concerned about a fiscal cliff and the impacts, when these same individuals are porking up the bill with unnecessary spending? Where are the checks and balances and why does it continue?

Please make it stop…

DCX2says:

Re: Re: Re: Re: Re: Re: Even more confused

I may be mistaken but I think the requirement is only that fiscal bills originate in the House. Although it’s kind of hard for a bill to originate in the House when you have the Speaker trying to pawn his responsibilities off on an entirely different branch of government.

Joesays:

Re: Re: Even more confused

Can we either remove the political parties and go independent, or make a system so everyday Americans can vote on the big legal bills? I know verification would be a pain, but it can’t take longer than how congress does it currently.

If that isn’t feasible why not demand from our congressional members to put these big bills online and let us read it in an easy to understand format so we can note which sections we as a people disagree with.

Oh yeah I forgot…we are a Republic not a Democracy.

DCX2says:

Re: Re:

Any company that doesn’t engage in profit sharing with their employees is redistributing wealth from those employees to the owners of the company.

It’s pretty easy to demonstrate, although it is inevitably followed by ad-homs about “Marxist!” even though nobody can refute the idea.

Acme Corp pays Wile E. Coyote $10/hour to make widgets. It takes Mr. Coyote one hour to make one widget. Let’s say the “management fee” per widget comes to about $2.50 and each widget costs $2.50 in resources. Acme Corp then sells the widget for $20, making $5 of pure profit. Mr. Coyote has created $15 in wealth (“management” consumed $2.50 and the $2.50 in resources already existed) but he only gets $10 of it.

In other words, Acme is paying Mr. Coyote less than his work is worth so that the owners can redistribute some of the wealth Mr. Coyote has created to themselves.

That Anonymous Cowardsays:

They were screaming to cut unemployment, medicare, medicaid and all of these other wasteful entitlements…
How about we start with their pork and bs like this first.
That and lets cut their pay too, we all have to feel the pinch never seems to apply to them.
I’d like to see them make it on 22K a year.
Its real easy to sit and say what people need when your making more than them, and handing out trophies that make sure they will take care of you later.

DCX2says:

Re: Re:

For what it’s worth, a couple mayors and governors have been taking the Food Stamp Challenge, where they try to survive on what Food Stamps provide. Living on food stamps tends not to be the kind of paradise that detractors of the social safety net make it out to be (although, if welfare and food stamps are so great, it makes you wonder why none of those detractors are quitting their jobs)

Similar to that idea, I have often thought that there should be a Congressional “lottery”. Every year, one Senator and four Representatives are picked at random (without replacement). The unlucky winners should then be forced to live for one year at the current federal poverty level.

John Fendersonsays:

Re: Re: Re: Re:

Living on food stamps tends not to be the kind of paradise that detractors of the social safety net make it out to be

This. It amazes me that anyone thinks otherwise. Nobody lives on welfare or food stamps if they have another option, and the vast majority of people who collect food stamps or welfare get off of those programs as soon as they can. That life sucks.

Anonymoussays:

Masnick, I just love it how you trash favorite villain over a paltry $150 million, yet somehow manage to COMPLETELY IGNORE the multi-BILLION dollar suckling on the taxpayer’s tit by your paymaster Google and their ilk.

http://thehill.com/blogs/hillicon-valley/technology/275317-tech-groups-laud-rad-tax-credit-extension-in-fiscal-cliff-deal

Glenn Beck should learn from you, Chubby. You got skills.

Teamansays:

New Laws

It sounds like the citizens need to pass some laws of our own.

1. No federal or state government can spend more money than it has, and borrowing money is illegal. Punishable by jail time and loss of ever serving in the government again.

2. No more military bases in other countries, where there is absolutely no need. Too much money is spent on bases in Japan, Germany, etc. Where there is no conflict of any kind.

3. No more subsidies, no more tax credits, no laws that mention any specific industry or business. If it applies to any of them, it applies to all of them.

4. No laws that mention specific Genders, Races, or Religions. No special treatment of specific groups at all regardless of these factors.

6. If any government official goes against the constitution, they lose citizenship and are shipped to whatever country will take them. Also, no “interpretation” of the constitution, it’s straight forward, and interpretation is only necessary when you’re trying to change its intended meaning.

5. The governments stops recognizing marriage at all, just to fix any problems and finally shut everyone up. It’s not their business to be in your private relationship anyway.

6. No person shall serve more than 8 total years in government service.

There are a few more, but I don’t want to make too long of a post, but I think this is a good template to start from.

Ninjasays:

And that’s why the US will fall. Even when the country is in dire need all the politicians and the big corporations can think about is their own short term profits and pockets. Now I only wonder if they’ll realize it in time and make a somewhat smooth landing or if it’ll be a catastrophe of epic proportions.

The sad part is that many will be dragged along with it.

Dave Nelsonsays:

Re: Re:

The US government, and the people of this great country need to take a very hard look at the history of the world. Civilizations, countries, and societies have all failed from essentially the same reasons. The wealthy want more and don’t care how they get it or who gets hurt in the process. Eventually the corruption weakens the strength and resolve of the local government and they get overrun by either their own army, their own citizens, or by an external force that sees an opportunity. Take heed, Washington, your day is coming.

The only fly in the ointment I can see is nuclear weapons. No previous society has had them available. We apparently have enough to destroy the world many times over and are probably stupid enough to use them if threatened. Good thing I’m too old to worry about it. My children and grandchildren, however, are not. I give us maybe ten years, maybe less.

Anonymoussays:

But, it’s stories like this that explain why so few people trust Congress, and why they’re fed up with “crony capitalism.”

They may not trust Congress, but if enough people were truly fed up with “crony capitalism” the same bunch of lame duck politicians would get reelected term after term after term. Defeating “progress” like SOPA and ACTA while leaving the Dianne Feinstein’s, the Orrin Hatch’s, and the Lamar Smith’s still safely secure in the seats does not indicate a particularly high level of “fed up”.

commenter8says:

End Corporate Welfare!

How To Cut Spending: End Corporate Welfare!!! ????
????
As Rex Nutting of Marketwatch noted in his 12/18/2012 article ?Why isn?t Obama demanding corporate welfare cuts??, ?$2.6 trillion could be saved […] It?s possible to achieve all the budget savings we need for the next 10 years simply by cutting the fat out of discretionary spending programs and tax expenditures [removing all of the corporate welfare] without raising tax rates on the wealthy or cutting the safety net at all.??????
?????
Oil and gas companies, which are raking in record profits, certainly don?t need $4 billion a year in subsidies, and even the oil company CEOs admit they don?t need it!?????
?????
Why are cuts to Social Security and Medicare even being discussed while literally billions in corporate welfare are constantly spilling out of the Treasury??
????
White House petition to End Corporate Welfare:?http://wh.gov/Qa6f

commenter8says:

How To Cut Spending: End Corporate Welfare!!! ????
????
As Rex Nutting of Marketwatch noted in his 12/18/2012 article ?Why isn?t Obama demanding corporate welfare cuts??, ?$2.6 trillion could be saved […] It?s possible to achieve all the budget savings we need for the next 10 years simply by cutting the fat out of discretionary spending programs and tax expenditures [removing all of the corporate welfare] without raising tax rates on the wealthy or cutting the safety net at all.??????
?????
Oil and gas companies, which are raking in record profits, certainly don?t need $4 billion a year in subsidies, and even the oil company CEOs admit they don?t need it!?????
?????
Why are cuts to Social Security and Medicare even being discussed while literally billions in corporate welfare are constantly spilling out of the Treasury??
????
White House petition to End Corporate Welfare:?http://wh.gov/Qa6f

commenter8says:

How To Cut Spending: End Corporate Welfare!!! ????
????
As Rex Nutting of Marketwatch noted in his 12/18/2012 article ?Why isn?t Obama demanding corporate welfare cuts??, ?$2.6 trillion could be saved […] It?s possible to achieve all the budget savings we need for the next 10 years simply by cutting the fat out of discretionary spending programs and tax expenditures [removing all of the corporate welfare] without raising tax rates on the wealthy or cutting the safety net at all.??????
?????
Oil and gas companies, which are raking in record profits, certainly don?t need $4 billion a year in subsidies, and even the oil company CEOs admit they don?t need it!?????
?????
Why are cuts to Social Security and Medicare even being discussed while literally billions in corporate welfare are constantly spilling out of the Treasury??
????
White House petition to End Corporate Welfare:?http://wh.gov/Qa6f

commenter8says:

How To Cut Spending: End Corporate Welfare!!! ????
????
As Rex Nutting of Marketwatch noted in his 12/18/2012 article ?Why isn?t Obama demanding corporate welfare cuts??, ?$2.6 trillion could be saved […] It?s possible to achieve all the budget savings we need for the next 10 years simply by cutting the fat out of discretionary spending programs and tax expenditures [removing all of the corporate welfare] without raising tax rates on the wealthy or cutting the safety net at all.??????
?????
Oil and gas companies, which are raking in record profits, certainly don?t need $4 billion a year in subsidies, and even the oil company CEOs admit they don?t need it!?????
?????
Why are cuts to Social Security and Medicare even being discussed while literally billions in corporate welfare are constantly spilling out of the Treasury??
????
White House petition to End Corporate Welfare:?http://wh.gov/Qa6f

commenter8says:

How To Cut Spending: End Corporate Welfare!!! ???? ????

As Rex Nutting of Marketwatch noted in his 12/18/2012 article ?Why isn?t Obama demanding corporate welfare cuts??, ?$2.6 trillion could be saved […] It?s possible to achieve all the budget savings we need for the next 10 years simply by cutting the fat out of discretionary spending programs and tax expenditures [removing all of the corporate welfare] without raising tax rates on the wealthy or cutting the safety net at all.??????
?????
Oil and gas companies, which are raking in record profits, certainly don?t need $4 billion a year in subsidies, and even the oil company CEOs admit they don?t need it!?????
?????
Why are cuts to Social Security and Medicare even being discussed while literally billions in corporate welfare are constantly spilling out of the Treasury??
????
White House petition to End Corporate Welfare:?http://wh.gov/Qa6f

Dave Nelsonsays:

Re: Re: How To Cut Spending: End Corporate Welfare!!! ???? ????

  1. commenter8 – you don’t need 5 (five) copies of the same posting on this forum! One will suffice.
  2. While I agree with you entirely, the reason it won’t happen is the money those same corporations are spending in DC to continue the welfare. The cash for said welfare has to come from somewhere, and, as usual, it’s the little people that pay the bill. Surely you don’t expect the rich or the corporations themselves to make any sacrifices. Heaven forfend! Bah!!!
Producers Guild Membersays:

Section 181 creates jobs

Wow. Calm down.

If you knew anything about the nuts and bolts of film/TV production, you’d know that the $20MM ceiling disqualifies 80%+ of studio movies. Most of the big movies you see in the cinema are $100MM-$200MM or more. So section 181 benefits smaller independent movies that create jobs.

If you know real, blue-collar entertainment workers (electricians, truck drivers, greensmen, carpenters) you know that the biggest loss of jobs has been to overseas production. Productions shoot in Canada, Bulgaria and other countries to cut costs and collect incentives.

The tax deduction in section 181 only applies to projects shot at least 75% in the USA. This will bring jobs back to the USA, as well as the money that a production spends on local businesses — which means even more jobs.

The section 181 deduction provides tax incentive for investors to back films made in the US using American workers. It stimulates the economy and helps out a lot of middle-class workers who have lost work to foreign competition.

This is a tax break that helps the little guy in the entertainment industry, not the corporate titan. It took a lot of effort to get this break which is tiny in comparison to other tax incentives given to the rich in other industries.

Please don’t ruin it for those who really need it.

-Member, Producers Guild of America

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