logo
Newsom wants a federal tax credit to save Hollywood. Why that's a long shot

Newsom wants a federal tax credit to save Hollywood. Why that's a long shot

Yahoo07-05-2025

Shortly after President Trump stunned Hollywood with his call for tariffs on films produced overseas, California Gov. Gavin Newsom waded into the debate with an unexpected offer.
Despite the public enmity between the two, Newsom reached out to the White House in hopes of working together on the creation of a $7.5-billion federal tax incentive to keep more productions in the U.S.
Hollywood insiders have wanted a federal tax incentive program all along. Some publicly cheered Newsom's Monday proposal.
Many lawmakers, including Sen. Adam Schiff (D-Burbank) and Rep. Laura Friedman (D-Glendale), have advocated for a national program to try to put the U.S. on a more equal footing with foreign countries that offer generous incentives.
But such an initiative faces significant obstacles.
It will be a difficult sell to the average American taxpayer, who may not be eager to support an industry viewed as wealthy and politically liberal. It's unclear where funding for the U.S. entertainment industry ranks on a list of ever-growing national priorities.
"I would give it 50/50 at best," Sanjay Sharma, who teaches media and entertainment finance at USC's Marshall School of Business, said of the incentive's odds.
Recently, a coalition of Hollywood unions and industry trade groups — including the Motion Picture Assn. and guilds representing screenwriters, directors and actors — backed the idea of a domestic production incentive. They said the proposal would advance the administration's goal of reshoring American jobs and providing economic growth around the country.
"As Congress undertakes 2025 tax legislation, we urge lawmakers to include a production incentive to support film and television production made by workers in America," the coalition said in a statement.
But with so many competing priorities facing the country, including infrastructure, homelessness and the opioid crisis, lawmakers could face an uphill battle in justifying a vote to effectively subsidize the entertainment industry.
"The political optics on it are going to be very, very difficult," said George Huang, a professor of screenwriting at the UCLA School of Theater, Film and Television. "To most people, [the entertainment industry] seems like a frivolous thing."
Even if a federal film tax incentive were to pass, it's not a guarantee that filming would automatically flow back to the U.S., particularly if other countries chose to increase their own tax credit programs in response, he said.
But such a proposal would provide much-needed support for the entertainment industry, which has been battered in recent years by the effects of the pandemic, the dual writers' and actors' strikes in 2023 and cutbacks in spending by the studios.
The situation has created what leaders call an employment crisis in the film and TV business, particularly in California.
"Right now the industry is teetering," Huang said. "This would go a long way in helping right the ship and putting us back on course to being the capital of the entertainment world.'
A federal tax incentive was part of a proposal from actor Jon Voight, one of Trump's so-called Hollywood ambassadors, and his manager, Steven Paul, who traveled to Mar-a-Lago last weekend to present Trump with a plan on bringing filming jobs back to the U.S.
That proposal included a 10% to 20% federal tax credit that could be added on top of individual state incentives, according to a document published by Deadline.
MPA Chief Executive Charles H. Rivkin also met with Voight last week, according to a source familiar with the matter who was not authorized to comment.
After the Deadline story published, Paul cautioned that the document was not meant as a full-on policy proposal.
'The document does not claim to represent collective views of the participating film and television organizations, but serves as a compilation of ideas explored in our discussions on how to strengthen our position as creative leaders,' Paul wrote.
In the meantime, the MPA and others have also lobbied Congress to extend and strengthen Section 181 of the federal tax code to encourage more films to stay in the U.S.
Such a move could boost smaller, independent productions as well as studio films. The section addressing film production was enacted in 2004 amid a recognition that more films were moving to Canada and Europe, and the U.S. needed to remain competitive.
Section 181 allows up to $15 million of qualified film and TV production expenses to be deductible during the year in which they were incurred — or up to $20 million if the project was produced in a low-income area, according to the MPA. Productions can qualify if three-quarters of their labor costs were in the U.S.
The measure allows filmmakers to take the deduction when the cost is incurred, rather than after the film is released. That's important to independent filmmakers who often work on shoestring budgets and can't wait for years to see the benefit.
'If there is a bright side, maybe some of the U.S.-based companies will start taking a look at their domestic production levels,' said Frank Albarella Jr., a partner at KPMG in its media and telecommunications unit. 'Maybe there will be some more federal and state incentives right here in the U.S. That's what people are hoping for.'
Times staff writer Stacy Perman contributed to this report.
Sign up for our Wide Shot newsletter to get the latest entertainment business news, analysis and insights.
This story originally appeared in Los Angeles Times.

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Trump aides want Texas to redraw its congressional maps to boost the GOP. What would that mean?
Trump aides want Texas to redraw its congressional maps to boost the GOP. What would that mean?

Yahoo

time10 minutes ago

  • Yahoo

Trump aides want Texas to redraw its congressional maps to boost the GOP. What would that mean?

This coverage is made possible through Votebeat, a nonpartisan news organization covering local election administration and voting access. Sign up for Votebeat Texas' free newsletters here. Republicans representing Texas in Congress are considering this week whether to push their state Legislature to take the unusual step of redrawing district lines to shore up the GOP's advantage in the U.S. House. But the contours of the plan, including whether Gov. Greg Abbott would call a special session of the Legislature to redraw the maps, remain largely uncertain. The idea is being driven by President Donald Trump's political advisers, who want to draw up new maps that would give Republicans a better chance to flip seats currently held by Democrats, according to two GOP congressional aides familiar with the matter. That proposal, which would involve shifting GOP voters from safely red districts into neighboring blue ones, is aimed at safeguarding Republicans' thin majority in Congress, where they control the lower chamber, 220-212. The redistricting proposal, and the Trump team's role in pushing it, was first reported by The New York Times Monday. Without a Republican majority in Congress, Trump's legislative agenda would likely stall, and the president could face investigations from newly empowered Democratic committee chairs intent on scrutinizing the White House. Here's what we know about the plan so far: On Capitol Hill, members of the Texas GOP delegation huddled Monday night to discuss the prospect of reshaping their districts. Most of the 25-member group expressed reluctance about the idea, citing concerns about jeopardizing their districts in next year's midterms if the new maps overextended the GOP's advantage, according to the two GOP aides, who spoke on the condition of anonymity to discuss the private deliberations. Rep. Jodey Arrington, R-Lubbock, was skeptical of the idea. 'We just recently worked on the new maps,' Arrington told The Texas Tribune. To reopen the process, he said, 'there'd have to be a significant benefit to our state.' The delegation has yet to be presented with mockups of new maps, two aides said. Each state's political maps must be redrawn once a decade, after each round of the U.S. census, to account for population growth and ensure every congressional and legislative district has roughly the same number of people. Texas lawmakers last overhauled their district lines in 2021. There's no federal law that prohibits states from redrawing district maps midcycle, said Justin Levitt, an election law professor at Loyola Marymount University and a former deputy assistant attorney general in the Department of Justice's civil rights division. Laws around the timing to redraw congressional and state district maps vary by state. In Texas, the state constitution doesn't specify timing, so the redrawing of maps is left to the discretion of the governor and the Legislature. Lawmakers gaveled out of their 140-day regular session last week, meaning they would need to be called back for a special session to change the state's political maps. Abbott has the sole authority to order overtime sessions and decide what lawmakers are allowed to consider. A trial is underway in El Paso in a long-running challenge to the state legislative and congressional district maps Texas drew after the 2020 U.S. Census. If Texas redraws its congressional maps, state officials would then ask the court to toss the claims challenging those districts 'that no longer exist,' Levitt said. The portion of the case over the state legislative district maps would continue. If the judge agrees, then both parties would have to file new legal claims for the updated maps. It isn't clear how much maps could change, but voters could find themselves in new districts, and Levitt said redrawing the lines in the middle of the redistricting cycle is a bad idea. 'If the people of Texas think that their representatives have done a bad job, then when the [district] lines change, they're not voting on those representatives anymore,' Levitt said. 'New people are voting on those representatives.' The National Democratic Redistricting Committee, Democrats' national arm for contesting state GOP mapmaking, said the proposal to expand Republicans' stronghold in Texas was 'yet another example of Trump trying to suppress votes in order to hold onto power.' 'Texas's congressional map is already being sued for violating the Voting Rights Act because it diminishes the voting power of the state's fast-growing Latino population,' John Bisognano, president of the NDRC said. 'To draw an even more extreme gerrymander would only assure that the barrage of legal challenges against Texas will continue.' When Republicans in charge of the Legislature redrew the district lines after the 2020 census, they focused on reinforcing their political support in districts already controlled by the GOP. This redistricting proposal would likely take a different approach. As things stand, Republicans hold 25 of the state's 38 congressional seats. Democrats hold 12 seats and are expected to regain control of Texas' one vacant seat in a special election this fall. Most of Texas' GOP-controlled districts lean heavily Republican: In last year's election, 24 of those 25 seats were carried by a Republican victor who received at least 60% of the vote or ran unopposed. The exception was U.S. Rep. Monica De La Cruz, R-Edinburg, who captured 57% of the vote and won by a comfortable 14-point margin. With little competition to speak of, The Times reported, Trump's political advisers believe at least some of those districts could bear the loss of GOP voters who would be reshuffled into neighboring, Democratic-held districts — giving Republican hopefuls a better chance to flip those seats from blue to red. The party in control of the White House frequently loses seats during midterm cycles, and Trump's team is likely looking to offset potential GOP losses in other states and improve the odds of holding on to a narrow House majority. Incumbent Republicans, though, don't love the idea of sacrificing a comfortable race in a safe district for the possibility of picking up a few seats, according to GOP aides. In 2003, after Texas Republicans initially left it up to the courts to draw new lines following the 2000 census, then-U.S. House Majority Leader Tom DeLay, a Sugar Land Republican, embarked instead on a bold course of action to consolidate GOP power in the state. He, along with his Republican allies, redrew the lines as the opening salvo to a multistate redistricting plan aimed at accumulating power for his party in states across the country. Enraged by the power play, Democrats fled the state, depriving the Texas House of the quorum it needed to function. The rebels eventually relented under threat of arrest, a rare power in the Texas Constitution used to compel absent members back to return to Austin when the Legislature is in session. The lines were then redrawn, cementing the GOP majority the delegation has enjoyed in Washington for the past two decades. However, what's at play this time is different than in the early 2000s, when Republicans had a newfound majority in the Legislature and had a number of vulnerable Democratic incumbents they could pick off. Now, Republicans have been entrenched in the majority for decades and will have to answer the question of whether there's really more to gain, said Kareem Crayton, the vice president of the Brennan Center for Justice's Washington office. 'That's the tradeoff. You can do that too much so that you actually make them so competitive that the other side wins,' Crayton said. 'That's always a danger.' Texas Republicans are planning to reconvene Thursday to continue discussing the plan, according to Rep. Beth Van Duyne, R-Irving, and Rep. Wesley Hunt, R-Houston, who said they will attend the meeting. Members of Trump's political team are also expected to attend, according to Hunt and two GOP congressional aides familiar with the matter. Natalia Contreras is a reporter for Votebeat in partnership with the Texas Tribune. She's based in Corpus Christi. Contact Natalia at ncontreras@ Disclosure: New York Times has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here. Big news: 20 more speakers join the TribFest lineup! New additions include Margaret Spellings, former U.S. secretary of education and CEO of the Bipartisan Policy Center; Michael Curry, former presiding bishop and primate of The Episcopal Church; Beto O'Rourke, former U.S. Representative, D-El Paso; Joe Lonsdale, entrepreneur, founder and managing partner at 8VC; and Katie Phang, journalist and trial lawyer. Get tickets. TribFest 2025 is presented by JPMorganChase.

Meta Platforms (META) Bets Big on AGI With $10 Billion Push and New AI Dream Team
Meta Platforms (META) Bets Big on AGI With $10 Billion Push and New AI Dream Team

Yahoo

time13 minutes ago

  • Yahoo

Meta Platforms (META) Bets Big on AGI With $10 Billion Push and New AI Dream Team

Meta Platforms, Inc. (NASDAQ:) is one of the 10 AI Stocks on Wall Street's Radar. On June 10, Bloomberg News reported that the company's CEO, Mark Zuckerberg, is setting up a team of experts to achieve what is known as 'artificial general intelligence' (AGI), or machines that can match or surpass human capabilities. Citing sources, the report has revealed that the new AI team is being set up along with a reported investment of over $10 billion in Scale AI. It further reported how Scale AI founder Alexandr Wang is expected to join the group after a deal is done. Reportedly, Zuckerberg is planning to personally recruit around 50 people, including a new head of AI research for the AGI team. The decision is being made after looking at the performance and reception of Meta's latest large language model, Llama 4, the report stated. While we acknowledge the potential of META as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and Disclosure: None.

TSMC (TSM) Reports 40% Revenue Surge in May as AI Chip Demand Booms
TSMC (TSM) Reports 40% Revenue Surge in May as AI Chip Demand Booms

Yahoo

time13 minutes ago

  • Yahoo

TSMC (TSM) Reports 40% Revenue Surge in May as AI Chip Demand Booms

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the 1. On June 10, the company reported its May revenue, which surged 40% year-over-year to NT$320.5 billion ($10.7 billion) as demand remained high for its AI chips. The contract chipmaker, which supplies to tech giants such as Apple and Nvidia, had its revenue up 39.6% from a year earlier but down 8% from April's figure. According to TSMC's CEO C.C. Wei, April softening was seasonal, and the company is ramping advanced nodes to ease bottlenecks. Its capacity expansions in Arizona and Taiwan are progressing according to plan. Moreover, new EUV tools and packaging lines are launching to boost throughput for the latest H100 and next-gen Gaudi GPUs. A macro view of a 5G/4G chips and modules, displaying the cutting edge technology of the company. Back in March, Wei joined President Donald Trump in announcing his intent to invest $100 billion in U.S.-based chip-manufacturing facilities. He acknowledged TSMC's projection of 'full-year 2025 revenue to increase by close to mid-20s percent in U.S. dollar terms' in the company's first-quarter earnings call in April. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) manufactures and sells advanced chips used in artificial intelligence applications. While we acknowledge the potential of TSM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store