A BIPARTISAN GROUP of senators and representatives unveiled a federal tax credit for the film industry on Thursday—part of a two-pronged plan to bring a majority of filmmaking back to the United States from overseas.
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GROUP → unveil → States
The bill would offer a 20 percent tax credit on compensation for individuals employed by film productions.
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bill → offer → productions
This would be “stackable” on top of other credits offered in the forty-some states that offer one variety of subsidy or another.
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that → offer → subsidy
Limiting it to compensation is a little surprising, given that most similar credits around the world are for all spending, but this allows the bill’s authors to frame it as a pure jobs bill, an effort to reshore American jobs that have fled overseas in recent years.
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that → limit → years
And that’s one reason why it’s backed by a bipartisan group of lawmakers—from California Democrats like Sen. Adam Schiff and Rep. Laura Friedman to Southern Republicans like South Carolina’s Sen. Tim Scott and Georgia’s Rep. Brian Jack.
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it → ’ → Scott
As those names and states suggest, the bill is designed to capture support from elected officials all over the country.
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bill → suggest → country
One way it does that is through ‘escalation clauses’ that ensure the subsidy will not simply go to studios with huge presences in California and New York.
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subsidy → do → California
The 20 percent tax credit could bump up to 30 percent with 5 percent bonuses aimed at increasing the breadth of the bill’s impact, including escalators for films shot in federally declared disaster areas, producers who spend at least $10 million in ten or more states, producers who increase their number of productions, and independent producers.
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who → bump → productions
One element that’s intriguing, and often left out of many state-level incentives, is that the tax credit will apply to both “above the line” (stars, directors, etc.) and below the line (set decorators, gaffers, etc.) compensation, excluding profit participation (i.e., “points”) and residuals.
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credit → ’ → participation
States are often wary of subsidizing, say, a $20 million star salary; no one wants to have to explain why tax dollars are paying for Tom Cruise’s mansion.
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dollars → subsidize → mansion
But on the other hand, it would mean those star salaries can be taxed here at home rather than overseas where the work is done.
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work → mean → home
“I always remind people that when Tom Cruise gets paid to do a film overseas, any payroll tax is being paid to that jurisdiction, not to the United States,” Rep. Friedman told me in an interview explaining this provision.
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Friedman → remind → provision
“So, when he’s here shooting, his salary actually is taxable by him personally . . . but it’s also taxable in terms of payroll tax.”
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it → ’ → tax
That the regulations for the tax credit will be overseen by the Treasury Department has given some pause and led to some concerns about the Trump administration having outsized say in what sorts of movies get produced.
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sorts → oversee → movies
We live in an age where, for instance, the Federal Communications Commission has abandoned any pretense of serving as a neutral arbiter of our nation’s broadcast regulations.
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Commission → live → regulations
Chairman Brendan Carr very clearly considers himself Trump’s bulldog rather than someone with any interest in applying the rules and regulations of the FCC evenhandedly.
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himself → consider → FCC
It’s no way to run a regulatory regime, but it’s the way it’s being run in certain quarters.
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it → ’ → quarters
Friedman said there’s nothing to worry about here and that such requirements were a “red line” for every party interested in getting a tax credit passed.
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credit → say → party
“The bill is very clear about what qualifies and what doesn’t and content is never mentioned,” she told me.
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she → qualify → me
“I’ve had lots of conversations with my Republican colleagues around this bill and people frequently have asked—stakeholders have asked—whether there was going to be any kind of content requirement or moderation in this, and that was a red line for all stakeholders.”
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that → have → stakeholders
There’s simply no mechanism by which Treasury would, at the behest of the president, get a say on the content side of the tax credit equation.
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Treasury → ’ → equation
WHICH BRINGS ME TO the second prong in this plan to reshore film production.
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WHICH → bring → production
It’s fair to say that this week’s settlement between the state attorneys general, led by California’s Rob Bonta, and Paramount-Skydance was a pretty clear-cut win for Paramount and loss for the states.
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settlement → ’ → states
As I noted in Morning Shots earlier this week, there were no structural remedies (e.g., divestments of cable channels) and Paramount had already insisted it plans on making thirty-plus movies per year for the near future.
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it → note → future
The AGs got Paramount to agree to spend at least $1.5 billion more in the United States on production over the next five years.
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Paramount → get → years
In and of itself, that’s not so interesting.
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that → ’ → itself
Here’s the intriguing part, from the summary of the settlement by Bonta’s office:
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part → ’ → office
If a federal film tax credit of at least 20% is passed, production in the U.S. would need to increase to be 20% of all film production for years one and two and at least 30% of all film production for the remaining years.
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production → pass → years
If, in addition to a federal tax credit, a more expansive state film tax credit is also passed in either California or New York, then production investment would need to increase to at least 40% of all film production being in the U.S instead of overseas.
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investment → pass → U.S
It remains to be seen whether or not the federal film credit passes, either by itself or as part of an omnibus after the election.
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credit → remain → election
We’ll see.
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We → see → ?
But this is a pretty pointed effort to reshore thousands of jobs that have fled overseas seeking cash from European and Middle Eastern subsidies.
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that → reshore → subsidies
Remember, Remember the Fifth of November
THE FILM ADAPTATION of V for Vendetta turns 20 this year, and to mark the occasion Saga Arts and Fathom Entertainment are rereleasing it in theaters on November 1 and 5.
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Arts → remember → November
You can buy tickets now!
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You → buy → tickets
To get you psyched for the occasion, I interviewed director James McTeigue about making the film.
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I → get → film
A longtime assistant director for filmmakers like the Wachowskis and George Lucas, McTeigue had lots to say about not only making his first feature as a director but also its renewed relevance in the Trump years.
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McTeigue → have → years
I hope you give the podcast a listen, and make sure to revisit the film when it’s in theaters!
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it → hope → theaters
THIS WEEK I REVIEWED PRIMETIME, which is about the rise and fall of Chris Hansen and his Dateline show, To Catch a Predator.
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which → review → Predator
Hansen is portrayed by Robert Pattinson with a sort of visceral glee and is absolutely the best reason to see the movie, but it also takes aim at a key facet of the whole thing: the voyeurism of watching someone’s life get destroyed in real time.
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life → portray → time
Primetime is not a subtle movie in certain regards, with Pattinson’s Hansen saying things like, “At the end of the day, a man must be held accountable for the actions he takes” and, following the death that marks the end of the film, “What would have happened if I wasn’t here?”
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I → say → film
…and 11 more, not listed.
The Aporia
