Within the next few months we can expect to see the Trump administration support a bill to lower the corporate tax rate. Of course, it is 100 percent certain that many liberal entertainers will be screaming and protesting about how unfair it would be to lower that tax rate. Every one of them should therefore be asked if they are therefore willing to quit working for the media corporations that pay them their exorbitant salaries. The reason is that Variety has reported that the media company executives, despite their political differences with President Donald Trump, are completely in support of him lowering their corporate tax rates:
Congress won’t be back in session until after Labor Day, and the big question among the showbiz lobby is, what’s next?
The hope is that the fall months will be consumed with tax reform — something that has long been on the wish list of the studios.
While many executives are not aligned with President Donald Trump and the Republican Congress politically, they are onboard when it comes to lowering the corporate tax rate, which is also a major push across corporate America. This is priority #1 on the agenda among media companies.
Attention liberal showbiz folks! You don't like the idea of lower corporate tax rates? Then you can protest by declining to accept salaries from your corporate media bosses who are pushing for a lower rate.
“To grow the economy and create jobs, a successful tax reform proposal must support innovation and domestic production, in industries like ours,” Patrick Kilcur, the MPAA’s vice president of global affairs, wrote in a letter, obtained by Variety, to Senate leaders last month. “Our member companies are high effective rate payers.”
But the entertainment business has a bevy of other items it is seeking out of the process, which is expected to last until the end of the year at the earliest.
Lower the corporate rate. Most major media companies pay high effective tax rates, closer to the 35% statutory rate than other companies in other sectors. General Electric, for instance, went through years when it paid no federal corporate taxes, while Apple famously used Ireland’s low corporate tax rates to park its profits overseas.
By contrast, The Walt Disney Co. paid an effective rate of 32.3% and Comcast 32.2% in the first quarter, according to Factset. Why have entertainment companies been more reluctant to pursue tax havens than companies in other sectors? There are some concerns over public backlash and, more practically, the fear of locating intellectual property in lower-tax countries that do not have as strong of copyright protections.
Major media companies also have amusement parks, news divisions, affiliates and backlots that are rooted in the United States.
But corporate representatives have warned that should tax reform fail this time around, they may start looking to locate some of their future projects overseas, accelerating the flight of production that has already migrated to countries like Great Britain.
Hopefully, if actors such as Matt Damon start screeching against a lower corporate tax rate, Mr. Kilcur will smack him on the side of the head with his beloved copy of Howard Zinn's "A People's History of the United States."