Hollywood does not need tax subsidies
Stop the cameras!
President Donald Trump has suddenly and publicly embraced government rescue of the movie industry, challenged today on multiple fronts. On Truth Social, Trump has announced support of tax credit for film production in this country..
This follows a lobbying effort by actor Jon Voight, a senior influential figure in Hollywood, whose advising group presented a comprehensive proposal following a series of meetings. While details are still being worked out, a key element reportedly is a 10% to 20% tax credit on top of existing state programs to stem the exodus overseas of television and movie productions.
Other powerful industry figures are also backing the effort, which has bipartisan support in Congress.
The challenge is undeniable. U.S. share of global film and television production has dropped from 53 percent in 38 percent since 2022. Australia, Canada, Ireland, the UK and parts of Eastern Europe are now production hubs.
Yet irony is also present. The history of Hollywood testifies to the importance of freedom.
Early movie production was based in New Jersey and New York. These entrepreneurs immediately ran into a massive stone wall known as the Edison Trust, formally the Motion Picture Patents Company, which monopolized production from 1908 to 1915. Thomas Edison, the inventor of modern illumination, also with business partners exploited ownership of patents essential to cameras and projectors.
Los Angeles provided an early, relatively safe haven for filmmakers, including when necessary, refuge nearby in Mexico. Southern California also offered great variety of locations, a generally sunny climate, low costs, lack of entrenched organized commercial, political and criminal interests and other attractions.
Hollywood began to flourish after federal courts declared the Edison Trust illegal.
Political reform also helped. Progressive leader Robert La Follette of Wisconsin served as governor and senator, ran for president in 1924 and successfully reformed politics in California as well as his home state.
His family spent winters in San Diego because of their son’s lung disease, a widespread health challenge until relatively recent times. “Fighting Bob” proved a catalyst for change among the people of the Golden State as well as the Badger State..
The early movie industry benefited from the reality as well as the image of operating in a relatively honest environment. Later, from 1950, Los Angeles Police Chief William Parker professionalized that department and rooted out corruption, further enhancing the positive image.
Depression-era desperation – fear itself – affected California along with the rest of the nation but Hollywood also prospered. People with enough money went to the movies, and found welcome escape in the fantasies films offered. Musical comedies and light café society melodramas were especially popular. Characters usually had ready cash.
Hard-boiled crime and detective stories also became extremely popular, reflecting ongoing public anxiety, reinforced by World War II.
California society dramatically reflected Great Depression hard times, without the restraint of long-established traditional institutions. Dr. Francis Townsend’s movement to pay a pension to everyone over 60 years old who promised to spend the money, and not work, started in Long Beach.
Sinclair Lewis’ fictional evangelist Elmer Gantry was based on real-life personalities found in startlingly large numbers in Southern California. Likewise, John Steinbeck’s “The Grapes of Wrath” was inspired by the real-life misery and resulting westward migration of the Depression. Studios profited from these and other authors, providing distraction to a challenged public.
The movie industry, now the media industry, has proven remarkably adaptable and durable.
In our time, Trump profited enormously from his television program, and has skillfully used the media to political advantage. .
U.S. tax credits are justifiable only to counter comparable policies by other nations.
• Arthur I. Cyr, acyr@carthage.edu, a retired professor of political economy at Carthage College in Kenosha, Wisconsin, is a former vice president of the Chicago Council on Foreign Relations and author of “After the Cold War— American Foreign Policy, Europe and Asia.”