Trump should not ‘save’ Hollywood with a tax – Latest News
President Donald Trump has no cause to reward a hostile Hollywood with federal tax credit — whereas leaving the industry’s underlying issues in California intact.
The California Post reported over the weekend that former LA mayoral candidate Spencer Pratt just lately met privately with President Donald Trump. His pitch: A 25% federal film-production tax credit to “bring back Hollywood.”
Pratt is not alone. Jon Voight, one of Trump’s particular ambassadors to Hollywood, has promoted a federal manufacturing credit as half of a broader industry-revival plan. Sylvester Stallone has joined leisure unions, studios and commerce organizations urging the identical.
President Donald Trump has no cause to reward a hostile Hollywood with federal tax credit AFP through Getty Images
They face a political downside earlier than they ever attain the coverage debate. Trump has a long reminiscence, and Hollywood spent the previous decade making an attempt to keep him out of the Oval Office, then denouncing him as soon as he received there anyway.
Robert De Niro known as Trump “a punk,” “a dog,” “a pig” and “a con.” George Clooney branded him a “xenophobic fascist.” Tom Hanks dismissed him as a “simplistic, self-involved gasbag.”
Ron Howard described him as a “self-serving, dishonest, morally bankrupt ego maniac.” Arnold Schwarzenegger declared Trump could be remembered because the “worst president ever.” Harrison Ford just lately mentioned Trump “scares the s— out of me” and known as him historical past’s best prison.
Those are solely a few examples. For years, the Oscars, Golden Globes, Emmys and SAG Awards doubled as venues for mocking Trump and lecturing his supporters. Anti-Trump politics turned half of Hollywood’s institutional tradition, not an occasional protest tied to at least one election.
The California Post reported over the weekend that former LA mayoral candidate Spencer Pratt just lately met privately with President Donald Trump. Andy Johnstone for CA Post
The industry additionally put critical money behind Trump’s opponents in all three presidential campaigns.
In 2016, George Clooney hosted main fundraisers for Hillary Clinton, with Jeffrey Katzenberg, Steven Spielberg and Haim Saban among the many co-hosts. The occasions generated an estimated $15 million.
In 2020, Clooney and Katzenberg raised $7 million for Joe Biden. A separate Saban occasion introduced in $4.5 million more.
In 2024, Clooney, Julia Roberts, Barbra Streisand, Jimmy Kimmel and Katzenberg staged a gala that raised over $30 million for Biden. After the Democrats swapped in Kamala Harris, a fundraiser that includes Stevie Wonder, Jessica Alba and Lily Tomlin introduced in one other $28 million.
Hollywood stays entitled to equal remedy beneath the law. Its politics alone do not settle the tax-credit query. But the industry is asking a president it spent a decade attacking to approve a stand-alone federal subsidy, stacked on prime of California’s own credit, for a business hardly starved for capital.
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That is the politics. The coverage case is the larger downside, and it fails on its own phrases.
Calling it a “tax credit” makes it sound much less like spending. But if the credit is refundable and exceeds a company’s tax legal responsibility, Washington writes a verify for the distinction.
A 25% federal credit would stack atop state subsidies that already attain 35% to 40% in California. Taxpayers would cowl bills studios have at all times paid themselves. Backers will rely complete manufacturing budgets as “economic impact,” though a lot of that work would occur anyway. Paying a company for one thing it already deliberate to do creates a windfall, not a job.
California’s nonpartisan Legislative Analyst’s Office discovered no compelling proof that the state’s movie credit grows the economic system after accounting for misplaced income and displaced exercise.
The largest studios, with the deepest lobbying benches, will likely be best positioned to seize the benefit. Smaller producers will battle over no matter stays. Studios keep the earnings when a manufacturing succeeds; taxpayers take in half of the associated fee both manner.
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Nor would the credit remedy Hollywood’s bigger issues: streaming upheaval, labor disruption and overseas competitors. California has made the mathematics worse by means of high taxes, pricey power and heavy statewide regulation, alongside with allowing complications and public dysfunction in Los Angeles. Producers can learn a spreadsheet. Sacramento’s reply is to pay favored corporations to tolerate prices it should decrease for everybody.
A federal credit would depart California’s competitiveness downside intact whereas making the remainder of the nation underwrite it. Lower taxes and lighter regulation for each business would do more than one other carveout for a linked industry.
Hollywood had each proper to marketing campaign towards Trump. But it used its cultural attain and financial machinery towards him in three straight campaigns, mocking him from awards levels, insulting him in interviews and raising tens of hundreds of thousands for Clinton, Biden and Harris. Now it desires his signature on a subsidy of its own, making the present ask a tougher sell than its backers appear to understand.
The federal tax code already accommodates too many particular provisions secured by industries with highly effective lobbying operations. A non-public assembly and a shiny economic-impact projection are not causes so as to add one other.
The reply should be easy: No federal Hollywood tax credit. Let Hollywood compete, and let California repair what California broke.
Jon Fleischman, a longtime strategist in California politics, writes at SoDoesItMatter.com.
