Saturday, September 10, 2005

Death By Taxes

Proposed movie tax has theater owners reeling
Levy likely to result in higher ticket prices

go to original article ... or email me for article text
"That cost could go up if a tax on movie theaters proposed by Gov. Jennifer Granholm is approved.

The 6% tax would be on the movies theaters buy from distributors, but that cost would almost certainly be passed on through increased ticket prices. Some theater owners said the increase could range from 30 cents to a dollar per ticket.

Proponents said the tax could bring in about $20 million annually to help the state's rising budget deficit. Michigan's projected deficit is $1 billion for the fiscal year that begins Oct. 1."
People seem to love taxing movie theaters. This is the second article I've come across that discusses the possibility of taxing the activity of moviegoing. For someone like me that's enough to qualify this as an epidemic.

I wonder if people on the outside of the industry are really just that unaware of how cash strapped theater businesses are. Or maybe it's just me that thinks they are. Maybe the bigger chains could absorb a tax like this and it's only the smaller independent theaters that are hurting. If that's the case, I think whatever legislation is being passed should segment the industry into more sensible parts. The game that national multiplex operations play isn't in the same league as independent theaters... it's arguably not even the same sport. So why would you want to take money from the little guys? You're not gonna get that much money anyway.

But of all the things to hit up, why would this legislation target the film rentals? Maybe they're caught up in the glamour of the movies and are mistakenly confusing them as the source of revenue for theaters. Film rentals and ticket sales are where everyone is hurting the most right now. Why not take a swing at concessions. At least the costs won't be passed directly down to anyone who wants to go to the movies (who are, by virtually any standard in the filmed enterainment business paying too much). And there's more money in it for the tax.

This highlights one of the inherent conflicts with a government that tries to make it's living off a capitalistic economy. Ideally the government benefits from the industries getting richer because they can claim a big percentage of their profits since their economic rules enabled and protected them as they amassed their wealth. But in creating powerful, money hungry insitutions, they produced industries that did not want to share their riches with anyone including the government. So by flexing their muscles in the lawmaking process, they get "favorable" legislation that let's them keep as much as they can get away with and spread out the damage to everyone else (who are of course less well equipped to be bearing the weight of the government's financial needs).

There need to be more incentives to being poor. But then, who would go to the movies? :)


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