Shortly after President Trump amazed Hollywood with his call at prices on films produced abroad, California Governor Gavin Newsom has waded in the debate with an unexpected offer.
Despite the public enmity between the two, Newsom contacted the White House in the hope of working together on the creation of a federal tax incentive of $ 7.5 billion to keep more productions in the United States
Hollywood initiates have always wanted a federal tax incentive program. A few publicly Applauded Newsom Monday proposal.
Many legislators, including Senator Adam Schiff (D-Burbank) and representative Laura Friedman (D-Glendale), pleaded for a national program to try to put the United States on a more equal foot with foreign countries that offer generous incentives.
But such an initiative faces important obstacles.
It will be a difficult sale to the average American taxpayer, which may not be impatient to support an industry considered rich and politically liberal. We do not know where financing of the American entertainment industry ranks on a list of constantly increasing national priorities.
“I would give it best 50/50,” said Sanjay Sharma, who teaches media and entertainment finances at the Marshall School of Business of the USC, about the incentive ratings.
On Tuesday, a coalition of Hollywood unions and industry commercial groups – including the Assn film. And guilds representing screenwriters, directors and actors – supported the idea of ​​an incentive of interior production. They declared that the proposal would make the administration’s objective progress to reshape American jobs and provide economic growth throughout the country.
“While the Congress undertook tax legislation in 2025, we urge legislators to include an incentive to produce the production and television production carried out by workers in America,” the coalition said in a statement.
But with so many competing priorities that the country faces, in particular infrastructure, the homeless and the opioid crisis, legislators could face a difficult battle to justify a vote to effectively subsidize the entertainment industry.
“Political optics on this subject will be very, very difficult,” said George Huang, professor of script at the UCLA School of Theater, Film and Television. “For most people, [the entertainment industry] It seems to be a frivolous thing.
Even if a federal incentive on the film was to pass, it is not a guarantee that filming would automatically return to the United States, in particular if other countries choose to increase their own tax credit programs in response, he said.
But such a proposal would provide essential support for the entertainment industry, which has been beaten in recent years by the effects of the pandemic, the boost of writers and actors in 2023 and discounts of expenditure by studios.
The situation has created what leaders call a job crisis in the cinema and television sector, especially in California.
“Right now, the industry vacillates,” said Huang. “This would greatly help to help the ship and get back online to be the capital of the world of entertainment.”
A federal tax incitement was part of a proposal from actor Jon Voight, one of Trump's Hollywood ambassadors, and his manager, Steven Paul, who went to Mar-A-Lago last weekend to present Trump a plan to bring back filming jobs to the United States
This proposal included a federal tax credit of 10% to 20% which could be added in addition to individual incentives, According to a document published by Deadline.
The director general of the AMP, Charles H. Rivkin, also met Voight last week, according to a source familiar with the question which was not allowed to comment.
After the publication of the history of the deadline, Paul warned that the document was not conceived as a proposal for a complete policy.
“The document does not pretend to represent the collective opinions of 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,” wrote Paul.
In the meantime, AMP and others also put pressure on the congress to extend and strengthen article 181 of the federal tax code to encourage more films to stay in the United States
Such a decision could stimulate smaller and independent productions as well as studio films. The section production section was promulgated in 2004 in the midst of recognition that more films moved to Canada and Europe, and the United States had to remain competitive.
Article 181 makes it possible to deduce up to $ 15 million in qualified film and television production costs during the year they were initiated – 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 United States
The measure allows filmmakers to take the deduction when the cost is engaged, rather than after the film's release. This is important for independent filmmakers who often work on bustring budgets and cannot wait for years to see the advantages.
“If there is a good side, maybe some of the American companies will start to take a look at their internal production levels,” said Frank Albarella, Jr., a partner of KPMG in his media and telecommunications unit. “Maybe there will be other federal and state incentives here in the United States, that's what people hope.”
