Top Stories: Will Actors Strike? SAG’s Crowded House ‘Twilight’ Sequel Switch NBC Exec Bloodbath Paramount Drops Producers DreamWorks Funding Woes Big Media Stiffs WGA Lousy IATSE/AMPTP Deal? The Real ‘Mad Men’            Top Stories: Will Actors Strike? SAG’s Crowded House ‘Twilight’ Sequel Switch NBC Exec Bloodbath Paramount Drops Producers DreamWorks Funding Woes Big Media Stiffs WGA Lousy IATSE/AMPTP Deal? The Real ‘Mad Men’            Top Stories: Will Actors Strike? SAG’s Crowded House ‘Twilight’ Sequel Switch NBC Exec Bloodbath Paramount Drops Producers DreamWorks Funding Woes Big Media Stiffs WGA Lousy IATSE/AMPTP Deal? The Real ‘Mad Men’            Top Stories: Will Actors Strike? SAG’s Crowded House ‘Twilight’ Sequel Switch NBC Exec Bloodbath Paramount Drops Producers DreamWorks Funding Woes Big Media Stiffs WGA Lousy IATSE/AMPTP Deal? The Real ‘Mad Men’            Top Stories: Will Actors Strike? SAG’s Crowded House ‘Twilight’ Sequel Switch NBC Exec Bloodbath Paramount Drops Producers DreamWorks Funding Woes Big Media Stiffs WGA Lousy IATSE/AMPTP Deal? The Real ‘Mad Men’            Top Stories: Will Actors Strike? SAG’s Crowded House ‘Twilight’ Sequel Switch NBC Exec Bloodbath Paramount Drops Producers DreamWorks Funding Woes Big Media Stiffs WGA Lousy IATSE/AMPTP Deal? The Real ‘Mad Men’           

Big Media To Get Cut Of Bailout Cash

I can't believe taxpayers will be forking over money to the Big Media cartel. But This LA Times article reports that the $700 billion financial bailout package making its way through Congress includes $470 million worth of tax breaks over the next decade for movie and TV employers shooting in the United States. The provisions were part of a broad tax extension bill approved earlier by the U.S. Senate and then folded into the revised bailout legislation that passed Wednesday. Don't get me wrong: it's an admirable goal to stem runaway overseas production and keep movies and TV being made here at home. Specifically, the legislation would allow filmmakers who shoot in the U.S. to qualify for a tax deduction granted in 2004 to domestic manufacturers like GM, Boeing and Xerox who make their products in the U.S. (It capped the top tax rate at 32% instead of 35%). Additionally, the tax package lifts the budget cap on the existing tax deduction, which was limited to movies that cost less than $15 million and thereby excluded most studio films where the cost of just craft services is that amount. Now producers would be able to immediately deduct all production costs up to $15 million regardless of the movie's total budget. The change also extends the existing credit, which was due to expire this year, to December 2009. You can thank lobbying by the Motion Picture Assn. of America, the Directors Guild of America and the Independent Film and Television Alliance for these breaks. Or not, depending on your POV. Again, congrats to the local paper for exposing what the trades failed to.

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11 Comments »

  1. “Don’t get me wrong: it’s an admirable goal to stem runaway overseas production and keep movies and TV being made here at home.”

    Nikki, you sound like John McCain. Your opening sentence makes it sounds like you’re pissed and flabbergasted. Then you go on to condone it.

    You can’t have it both ways. I am THRILLED the government will be offering incentives to help keep movies filmed in the US. The benefits to the workers - many of us who have been unemployed now for four months - will more than outweigh the initial expenditure.

    I think you’re listening to too much Republican talk radio.

    Comment by GovtcanbeGood — October 2, 2008 @ 11:41 am

  2. I’m with you GovtCanBeGood (heh). How is this bad, exactly?

    Comment by TJ — October 2, 2008 @ 11:59 am

  3. Haven’t you heard? The $700 Billion is now $850 Billion and counting as they need to buy votes to get it through the House. This will tank the economy and we will all lose jobs. I doubt there will be anybody with the spare change to go to your movies or buy DVD’s. On the other hand, there will probably be a lot more folks staying home and watching TV.

    Comment by Linda — October 2, 2008 @ 12:36 pm

  4. “Again, congrats to the local paper for exposing what the trades failed to.”
    And you should add, what YOU failed to pick up as well, Nikki, despite you’re “I’m a Wall Street Wiz” act. You just as dumb as the trades, I guess.

    Comment by You Don't Need to know — October 2, 2008 @ 12:42 pm

  5. Nikki
    I am thrilled that this incentive is being extended. I can personally attest to having been able to encourage fat cat investors to invest in a film to take advantage of the incentive. From experience an investor can write down the entire investment in the year the film is made against other passive income from the same year. The returns from the film’s revenue (yeah right, as if…) flow back to same investor treated for tax purposes as capital gains.
    Say you sell this incredible web site for $10 million in 2009, you will owe the feds something; but instead also in 2009 you drop “x” into a movie production. Now you have a chance to return on this investment vs. tax money gone.

    Comment by Buck Zollo — October 2, 2008 @ 12:48 pm

  6. Where can one find the specifics on this tax incentive?

    Comment by Question — October 2, 2008 @ 1:43 pm

  7. The big question is: where is the tax incentive for keeping production in Hollywood? Arnold has asked for it, but the lefties who run the California Legislature only see raising taxes as their first and only job. Tax breaks - no way. To them, production fleeing away to other states means nothing, but when the lost jobs are realized they will then wail and cry about the ‘bad economy’.

    New blood is not only needed in Congress; a major transfusion is required to overhaul the worst state legislature in the U.S. (I’m referring, of course, to the California Assembly and State Senate.)

    Comment by savvydude — October 2, 2008 @ 2:15 pm

  8. It’s not the studios who benefit from this, Nikki. It’s indie producers who have to go around begging for table scraps in order to make a film. And for the little guys because it’s a huge incentive to get the money guys to plunk down some cash.

    Comment by Crystal Diane Stevens — October 2, 2008 @ 5:39 pm

  9. The incentive legistion was Section 181 of the American Jobs Creation Act and can be read here.

    And to Nikki, first of all this is good as it has a requirement that 75% of the money covered is spent in the US so those films, lab work, special effects, etc… stay here. Secondly it is not a total write-off against your taxes, rather it is an expense against income. A crucial distinction.

    If you spend have $1M in passive income (meaning you’re a big time investor) then you pay the top federal marginal rate of 15%. If you put $1M into a film under this act you get to deduct that from your income so you are risking $850K and saving yourself $150K in tax burden. It is a nice perk to lure in investors since they are now only risking 85% of the money they are investing.

    Comment by NMH — October 2, 2008 @ 7:58 pm

  10. Staged “debate” dance now ready for 24/7 consumption?
    Bailout Barack Obama w/partner Bailout John McCain.

    Full-spectrum media suppression/distortion
    target Ralph Nader and Ron Paul.

    Your vote is your power,
    they fear it, use it.

    Comment by Paul & Nader v Bailout! — October 3, 2008 @ 7:09 am

  11. I know this isn’t going to be a popular viewpoint but I blame Rep Watson for this

    I agree that runaway production is a huge issue with SAG and the other entertainment unions and believe you me I want to see as much production stay in the USA as possible but how revolting is it of Rep. Diane Watson to trade her vote on the bailout for the extension of the tax credit that keeps production in the USA for another 10 years?

    Would you pay $700 billion of everyone’s money for $478 million in tax credits that probably will mostly benefit the six media conglomerates and maybe throw a few crumbs to the unions?

    BTW if you want to complain to Diane Watson (this is worthy legislation, keeping the tax break that stops runaway production but it belongs in the *tax code* and not in an utterly unrelated bill that is for financial institutions and has most ordinary Americans ready to revolt …as if the tax code isn’t convoluted and complicated enough ) here’s the lowdown:

    Contact page on her website is at
    http://www.house.gov/watson/contact.shtml

    Offices
    Washington Office
    125 Cannon HOB
    Washington, DC 20515-0533
    phone: 202-225-7084
    fax: 202-225-2422

    Los Angeles Office
    4322 Wilshire Blvd, Suite 302
    Los Angeles, CA 90010
    phone: 323-965-1422
    fax: 323-965-1113

    If you can’t get through on her email (the House email servers are experiencing intermittent traffic overloads) call and ask to speak to one of her aides in either office…they will get the message on to her. Or fax a copy of what you would be emailing to either office.

    I for one am outraged that she would screw SAG in this way and I don’t even live in her district nor am I an actor or a union member…I’m just a mere fan. But I’m calling anyway…how dare Rep Watson exploit the poor prospects of rank and file workers of Hollywood and set them up for blame if this bailout bill passes.

    Comment by Put This In A Tax Bill — October 3, 2008 @ 8:20 am

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