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Tuesday, August 09, 2011

HOLLYWOOD LAFFING

"Given the entertainment industries' role as the Democrats' campaign finance ATM, it seems likely that the president might soon reconsider his rhetoric as well."

The Obama Plan
Glenn Reynolds, the Instapundit, thinks that we should give the Democrats tax increases, after all they keep insisting we should have them. What is he talking about?
One of the things that's been floating around the Web over the past week is a video clip from 1953. It's a short film produced by the motion picture industry, seeking the end of a 20 percent excise tax on movie theaters' gross revenues that had been imposed at the end of World War II as a deficit-cutting measure. (Yes, gross, not net).

In the film, figures ranging from industry big shots to humble ticket collectors talk about how the tax is hurting their industry and killing jobs, and ask Congress to repeal the tax.

They even explain, in a sort of pre-Art Laffer supply-side way, that a cut in theater taxes might actually produce an increase in federal revenues as the result of greater economic growth.
Well he thinks that should be revoked: put that excise tax back on Hollywood, after all they keep demanding higher taxes, right? Didn't Matt Damon recently say he'd gladly pay higher taxes?

Reynolds has another tax idea as well; a 50% surtax on any earnings by political appointees in excess of their prior government salaries for the first five years after they leave office. He gives an example of how this is actually a good idea; basically when someone in the federal government does their job, they tend to get into contact with CEOs of major industries and lobbyists from various corporations. When they leave government, all too often (especially the more powerful they are) they get instant high-paying, high-benefit jobs that require little actual work in a major industry.

Now, this is difficult to prove is the result of sweetheart deals for the business while in government; after all, these guys carry contacts and experience with them that might be useful to the business. But its difficult to get away from the unpleasant odor and this kind of tax would at least discourage the practice, if not penalize it.

Here's a link to the movie Reynolds refers to, incidentally. You wouldn't see this come out of Hollywood these days, not ever. They actually seem to understand economics.

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