In a significant development for Hollywood, former President Donald Trump expressed his support for a federal tax incentive aimed at bolstering film and television production in the United States. This endorsement, long sought after by the entertainment industry, reflects a growing concern over domestic production losses.
Trump’s Call to Action
On Monday, Trump took to Truth Social to announce his intention to advocate for a bipartisan bill during a crucial time for the industry. “I am going to suggest that Republicans and Democrats get together, and immediately craft Legislation to save the Movie, Television, and Entertainment Business in America,” he stated. He urged Congress to approve a “Federal Production Incentive to create Entertainment Jobs in America,” emphasizing that such a measure could be implemented swiftly and effectively.
Hollywood’s Ongoing Struggles
With a marked decrease in domestic production since the streaming boom ended in 2022, industry stakeholders have witnessed severe consequences, including the loss of approximately 73,000 jobs nationwide, with two-thirds of these in Los Angeles. In light of these challenges, Trump had previously proposed imposing a 100% tariff on films produced overseas, although many in the industry have redirected his focus toward a tax credit model similar to what is available in Canada and the U.K.
Support from Lawmakers and Industry Leaders
Democratic lawmakers have rallied behind the idea, with notable support from Sen. Adam Schiff, who held a hearing on the matter earlier this year. Schiff emphasized that Republican support hinged on clear backing from the White House, a signal that Trump’s endorsement may provide.
Charles Rivkin, CEO of the Motion Picture Association, praised Trump’s endorsement, stating, “A federal incentive would be a landmark step toward bringing more production to local communities in all 50 states, strengthening our nation’s economy.” He urged continued collaboration with bipartisan leaders to enact effective incentives into law.
Hopes for Tax Credits
Last year, Schiff proposed draft legislation that included a 15% credit on labor costs incurred in the U.S., while the MPA has been advocating for a more substantial 20% credit alongside Jon Voight, Trump’s “special ambassador” to Hollywood. Trump noted his recent discussion with Voight, highlighting his commitment to reviving the industry. “Hollywood is a Complete and Total Disaster! Despite the name, it is getting very little work,” he remarked, drawing attention to the exodus of production to countries with more favorable incentives.
The Economic Argument
Trump argued that implementing a federal tax incentive would not only restore jobs but also yield a substantial return on investment for the U.S. Treasury. He stated, “The amount of money spent on Tax Incentives will be made up tenfold by the money pouring into the Treasury’s coffers.” This argument aligns with efforts by some lawmakers to revisit Section 181, which allowed independent producers to accelerate depreciation on film investments but expired last year.
A federal incentive would provide studios and producers with a credit or rebate on a percentage of production costs, complementing state-level incentives that currently exist in locations like California and New York. Advocates maintain that this would not only reinvigorate traditional production hubs but also benefit states lacking in production, such as Florida and Michigan.
Bipartisan Collaboration and Future Goals
Schiff echoed Trump’s sentiments in a statement on X, calling for immediate congressional action: “Let’s work together — Republicans and Democrats — to get this done, and bring the movie magic back to America.” Similarly, Rep. Laura Friedman from Burbank has been collaborating with her Republican colleagues to expedite the passage of a tax incentive bill. “There’s no reason Canada, the UK, or Australia should be taking our jobs,” she stated, emphasizing the need to retain talent domestically.
The Directors Guild of America has also been pushing for a federal incentive, with studios committing to advocate for it during past negotiations. “We look forward to working with the Administration and Congress on a bipartisan bill that will have the greatest possible impact on promoting domestic film and television production,” said Russell Hollander, the union’s national executive director.
