Tuesday, February 3, 2009

LOL, Stimulus Package Includes Tax Breaks for Hollywood

In my book, there isn't anything wrong with tax cuts anywhere in the economy. However, with that said, a tax cut of $246 million for the movie industry is about the most laughable cut you could make, outside of a tax cut for lobbyists.

First, this is a supposed to be part of an economic stimulus package. Translation, the government is supposedly attempting to boost weak sectors of the economy--which is generally the capital goods sector. According to business cycle theory, during a recession the economy is shifting from the capital goods spending to consumer spending. And, indeed, that is what is happening. The movie industry is breaking records all over the place. In January, they took in over a billion dollars. Freezing cold January!!

Giving the movie industry stimulus, is like giving the Energizer Bunny a shot of Red Bull.

Of course, there may be another reason for the tax cuts for movie moguls. As NyPo reports:

Big Hollywood opened its hearts - and fat wallets - to get President Obama into the White House and give Democrats both chambers of Congress and now it's time to return the love...

It's the least Democrats can do for some of their richest and most generous supporters, who gave nearly $20 million in campaign contributions to Democrats during the 2008 election cycle, according to OpenSecrets.org.

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