Wednesday, January 2, 2013

Soak The Rich (Except the Entertainment Industry)

Breitbart.com and ABC are reporting about the little special deals included in the budget deal to avoid going off the cliff.  Not surprisingly, various interest groups received extensions to their special tax breaks -- including the entertainment industry, which will continue to enjoy a tax break that lets them expense production costs instead of treating these as a cost that is depreciated.  The original provision apparently only applied to productions of less than $15 million ($20 million in "certain designated zones"), but according to Breitbart, it now applies to all productions, including individual television series episodes, so you get to expense the first $15 million (or $20 million) in the year that you spend the money.

The justification for this is that it only applies if "at least 75 percent of the total compensation of the production is compensation for services performed in the United States by actors, directors, producers, and other production personnel."  This is to encourage U.S. production, rather than making movies in foreign countries.  But this is clearly a gift to the industry that does Obama's propaganda.  According to the Congressional Joint Committee on Taxation, the effect is a $266 million dollar revenue reduction in 2013.

Of course, there is no requirement that a film has to be promoting leftist propaganda to enjoy the tax break.  So, all those rich Americans who want to use film as a tool for promoting our point of view can take advantage of it as well.  (As soon as we find such persons, we'll let you know.)

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