Sunday, August 07, 2011

Be Careful What You Wish For

Matt Damon has been in the news this week for his blustery, cringe-inducing performance at last week's Save Our Schools Rally in DC, a rally that drew a whopping few-thousand attendees. Damon and his leftie friends in Hollywood want higher taxes, so the Instapundit puts forth what they might consider a "modest proposal":
But why should Democrats be the only ones to enjoy the fun of taxing people they dislike?
You can already tell this is going to be good.
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...

But while I'm usually for tax cuts, in this case I think that's too bad. Because with this battle over, Hollywood stopped talking loudly about the damage done by high taxes, pretty much for good...

Were I a Republican senator or representative, I would be agitating to repeal the "Eisenhower tax cut" on the movie industry and restore the excise tax. I think I would also look at imposing similar taxes on sales of DVDs, pay-per-view movies, CDs, downloadable music, and related products.

I'd also look at the tax and accounting treatment of these industries to see if they were taking advantage of any special "loopholes" that could be closed as a means of reducing "tax expenditures." (Answer: Yes, they are.)

America, after all, is facing the largest national debt in relation to GDP that it has faced since the end of World War II, so a return to the measures deemed necessary then is surely justifiable now.

The president's own rhetoric about revenues certainly suggests so. Perhaps the bill could be named the "Greatest Generation Tax Fairness Act" in recognition of its history.
It's all about "shared sacrifice", you know, and some people just make too much money. It's not fair to the rest of us--especially us teachers who, according to Damon, make a sh***y salary.
Should legislation of this sort be passed -- or even credibly threatened -- I think we can expect to see Hollywood rediscover the dangers posed by "job killing tax increases," just as pro-tax-increase Warren Buffet changed his tune once his own corporate-jet business was threatened.

And, given the entertainment industries' role as the Democrats' campaign finance ATM, it seems likely that the president might soon reconsider his rhetoric as well.
Why do I say that his idea is a modest proposal? Because we could expect Hollywood types to howl as if he'd suggested eating Irish babies.

(BTW, here's a link I found for that 1953 video.)

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