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Live From New York
Alec Baldwin, Right on Taxes
In one of the more ironic interviews in recent memory, Alec Baldwin last week told local cable news host Dominic Carter that Governor David Paterson should keep the current tax incentives for film and television companies that set up shop in New York. "I'm telling you right now," the actor warned, "if these tax breaks are not reinstated into the budget, film production in this town is going to collapse, and television production is going to collapse, and it's all going to go to California."
Currently, film and TV companies get a 30% tax break on production costs for shows shot in New York. Baldwin's point was that if you take away that incentive -- in effect, if you raise the tax rates on these companies -- you're going to wind up with less actual tax revenues coming into the state's coffers. A lower percentage of something is still more than a higher percentage of nothing.
What the uber-liberal Baldwin has lately wrapped his mind around is the message conservative economists have preached for decades: Hiking the government's cut of taxpayers' earnings doesn't necessarily mean hiking the total tax dollars the government is taking in.
It's an idea everyone understands, intuitively. Once you start tinkering with tax rates -- and this goes for any kind of tax -- you run the risk of affecting people's behavior. Suppose, for example, New York Mayor Michael Bloomberg and the City Council decided to address the city's dire budget deficit by raising the sales tax on goods and services purchased in the five boroughs from the present 8.35% to 99%. Sounds logical, on paper. Think of all the extra money the city would rake in!
Except we all know what would happen. Consumers would immediately stop buying stuff in the city. They'd shop in New Jersey or Long Island or Westchester County instead. Raising the sales tax from 8% to 99% would more likely bankrupt the city than close its budget shortfall. On the other hand, if you raised the sales tax to 9%, you probably wouldn't affect people's behavior very much -- and you might well wind up with greater revenue. But when it comes to tax increases, there's always a point of (literally) diminishing returns.
If Baldwin has had his moment of clarity, we can only hope that President Obama will soon follow suit-- since the relationship between tax rates and tax revenues seems to be a genuine intellectual blind spot for him. During an April 2008 presidential debate, moderator Charlie Gibson pointed out to candidate Obama -- who had proposed raising the tax rate on capital gains from 15% to as high as 28% -- that when the capital gains tax rate had been raised, during the 1980s, the government collected less money, and when it had been lowered, first by Bill Clinton and then George W. Bush, the government collected more money. Obama's response? "I would look at raising the capital gains tax for purposes of fairness."
Cutting off your nose to spite your face may, under certain circumstances, be fair. But it's always foolish.
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genghis| 3.6.09 @ 6:14AM
Alec who??? The guy that moved to Canada?
kim bassinger| 3.6.09 @ 6:17AM
Must be an old photo of Alec. He's moved on to his Budha look-alike phase.
AlecB| 3.6.09 @ 6:59AM
Look, Kim, at least I drew the line at lip enhancement. Give it a rest.
SharonJ| 3.6.09 @ 7:10AM
Oh, come on, Alec! Don't be greedy! Pay your fair share! Why don't YOU and your ultra-liberal actor cronies take a pay cut to make up for the 30% tax break New Yorkers give you to film in their city? No, you want to tax people in this country to pay for your ultra-liberal causes and then expect us to subsidize the business that pays you millions. Isn't that rich!
JTS| 3.6.09 @ 7:25AM
I wonder if Bob has a chart for this?
Griff| 3.6.09 @ 7:39AM
This is only a momentary foray into consciousness for Alec. If only Obamachev would have a similar moment.
Dave Lincoln| 3.6.09 @ 8:02AM
That's wishful thinking Mark - there aint no moment of clarity anywhere in this guy. He just wants to stay in New York (probably got a pissed-off ex-domestic partner in L.A.). It's just selfishness. This guy doesn't have the brain power to see the light "oh, so maybe that's the same thing for another business. you tax it too high, and the business moves overseas, oohhhh"
You give him too much credit. Chalk it up to selfishness.
hk40cal| 3.6.09 @ 8:45AM
Try asking Baldwin about taxes that do NOT have to do with his career.....you will get a completely different responce....as for Obama, Its NOT what he says It's HOW he says it 'Fariness'
Obama's response? "I would look at raising the capital gains tax for purposes of fairness."
Joan| 3.6.09 @ 9:07AM
Mark, are you serious? The mayor wanted to raise the tax to 99%!!! or is that a typo? Who in their right mind who shop in a city that charges 99% sales tax????
William| 3.6.09 @ 9:38AM
Come on Alec, it is time to get with the program, be part of the deal.
(I made that up myself)
Mark| 3.6.09 @ 9:39AM
What is "fair"? 25%? 30%? 60%?
How about all and a kick in the shins to boot? Life is not "fair", there is no "fair". Like "luck", "fair" is a concept of the imagination. It's a tautology to justify envy.
Your mother knew that, your kindergarten teacher knew that. Why doesn't the left know it? Oh, wait, they think like toddlers.
Todd| 3.6.09 @ 9:53AM
Cmon Joan, of course he is not serious but he is using it as a case in point. I guarantee you these lefty Hollywood multi-millionaire types are scheduling meetings with their accountants and financial planners to try to avoid paying any extra tax they can get away with. These people worship money and their bleeding hearts only extends to other peoples money. Alec Baldwin represents their hypocrisy very well.
Trotter| 3.6.09 @ 10:17AM
While I would love to take this moment of Baldwin lucidity as the proverbial light at the end of the leftist tunnel, sadly I can't. Like every other hypocritical liberal, Baldwin in no way extends this line of thinking into the overall discussion of tax policy. Until that happens, this will remain nothing more than a self-serving ploy at keeping his fat-ass rich and comfy.
tonypal| 3.6.09 @ 10:52AM
JTS:
Good one. Of course, with the charts comes the (bizarrely misplaced) condescension and name calling. It's really just a matter of time. We just have to wait for the alarm clock to ring up on Mt. Olympus.
tonypal| 3.6.09 @ 11:01AM
Trotter:
I'm not sure if they still do it, but when Giuliani was mayor of NYC, they would have an annual sales tax holiday for one week. The city would explode in an orgy of commerce, far beyond the norm. Businesses would have to hire temp workers just to deal with the increased load and tax revenues would temporarily soar.
Now, you would think that in the greatest city in the world, with (supposedly) the smartest and most sophisticated people around, something would be learned from these experiences. Alas, the week would end and the high taxes returned.
So why would the good people of NYC and its political leaders not take the hint and redo the tax code, substantially reducing the sales tax? One word: "LIBERALISM." The ideology of liberalism, which of course is utterly pervasive in NYC, particularly Manhattan, trumps common sense. To enact permanent legislation designed to lower the tax burden in order to attract business and actually increase tax revenues would be to admit that supply-side economics works. In NYC, that will happen over their dead bodies.
*Will now await obnoxious reply from Bob
imxio| 3.6.09 @ 11:34AM
The assumption is that Obama cares what happens to the economy. Even his true-believers, if Alec is any indication, assume the does. Were that true, nothing the man has done makes any sense. If, on the other hand, ruining the economy so that he can ram through even more of his fascist agenda is his real goal...I'd say he's being extraordinarily successful.
Be careful what you wish (vote) for...
Pingback| 3.6.09 @ 11:39AM
The American Spectator : Alec Baldwin, Right on Taxes | Money Blog : 10 Dollars : Mon links to this page. Here’s an excerpt:
Doctor Right| 3.6.09 @ 12:05PM
Obama is a fool and a total idealogue.
Don't look to him to admit his ideas and policies are wrong, even after he's been impeached (yes, that's my prediction, and with the Democrats shouldering much of the blame for approving his disastrous economic policies, they will happily take part).
D Jones| 3.6.09 @ 12:10PM
Assuming that Obama would "see the light" about the point of diminishing returns in taxes completely misses the point of his entire political philosophy--a philosophy that he revealed with his "for purposes of fairness" remark that you quoted. He is not so much interested in balancing the budget or increasing the government's take as he is about "spreading the wealth" by punishing the achievers and taking us down the well-trodden road of socialism--a real failed policy of the past.
Tax Guru| 3.6.09 @ 12:19PM
Doesn't it not, then, hold to logic that tax breaks in all sectors will help the economy? I don't understand how it is beneficial in this instance, but not others.
molonlabe28| 3.6.09 @ 12:31PM
Alec who?
Louis Jenkins| 3.6.09 @ 12:50PM
Baldwin is a hypocrite ser'vant. Living in a bubble world movie/celeb/media types picked a side and are now beginning to see the maws of an enormous all consuming political machine encroaching on their accumulated wealth. (See Whoppi Goldberg's comments on the View this am.) They are going to be forced to live with the monster that they have created. Will Baldwin really move to Canada this time? He's being forced to 'feel' the conservative's pain. I can only laugh at the pompous fools.
Stan Redmond| 3.6.09 @ 12:54PM
Taxes are only for regular folk. Celebrities play an important role in society and that is tax enough for them. Don't you regular gun clinging troglodytes KNOW this?
David Govett| 3.6.09 @ 1:05PM
Liberals must adhere to the liberal dogma in toto. No fact, however minor, however obvious, however stubborn, can be allowed to disturb the liberal's crystal-clear vision of utopia.
JTS| 3.6.09 @ 1:36PM
tonypal:
We just have to wait for the alarm clock to ring up on Mt. Olympus.
==============================
LOL - Ah yes, I forgot. The gods sleep late!
Anthony| 3.6.09 @ 2:08PM
Why da norve of dis guy! Tax breaks for "Big Hollywood". Hey Alec, remember what V.P. big labor butt kisser said during the campaign, "It's time to get into the game, time to pay your fair share". God, I love this, these lefties are finally awakening up to the nightmare they created. PLEASE ALEC. THIS TIME MOVE TO CANADA.
Pat| 3.6.09 @ 4:02PM
Used to be the definition of a "conservative": "a liberal who was recently mugged". Now and into the future, defintion of a conservative: a liberal who had his taxes raised. What a great country we live in where there's equal opportunity poetic justice.
Joe Biden| 3.6.09 @ 4:06PM
Alex, that is real patriotic of you and the film industry.
Batman| 3.6.09 @ 5:10PM
Remember, taxes aren't a subject liberals understand because all they see is the spending. This is why a law to balance the budget is a bad idea when liberals are in charge - they'll peg the spending first and then go looking for ways to raise the money (taxes) instead of rethinking the spending models.
No, with government a-holes you start from last year's budget, increase it across the board by a certain percentage and then scream that taxes must be raised or they won't have enough money "for the children".
They never are forced to justify their spending levels, bureaurcracy, overhead or if the damn program even works.
And anyone out there in left-wing looney land acutally think any "stimulus" spending is a one time shot are either stupid (I know, redundant) or are liars. Every dime spent will be rolled into the next year "baseline" and increased. If a conservative complains they will be accused of wanting to "starve kids", etc. for "cutting" the budget.
You see, when children don't get all they asked for, the parent is obviously taking something away.
Jeffrey Schrembs| 3.6.09 @ 5:30PM
Baldwin? Alex "3rd Rock" Baldwin?
ACTUALLY admitted that TAX CUTS, even for the rich/powerful, work?
WOW!
I guess things have improved, and Alex has seen the light, so that Alex puppet strings (from Soros, MoveOn, etc) no longer control his mouth.
Hope...is renewed.
Jeffrey Schrembs
latsiha| 3.6.09 @ 5:54PM
Ok, Ok.
Alec, you're a second tier actor, third class intellect, and failed parent. Obscurity is your best option at this point. Also, Weight Watchers.
Kim simply outclasses you.
Gen| 3.6.09 @ 10:00PM
Hollywood tax cuts are ridiculous. It's just a way for BO to pay back those who told the brainless masses to vote for him. Raise taxes for people who work their buns off, decrease taxes for groups that make just as much. Here's a tip: people are going to theaters less b/c the tickets cost to much. Does anyone know why theaters charge so much for tickets?
Here's a bit of info I learned a while back: Movie Theaters have to charge high prices to pay for the rights to show the movie. They don't make money off the tickets (guess who gets that). They make money off concessions, which is why that is so high priced and they're actually financially hurt by people bringing their own food. Source: a manager of a Cinemark 16.
Madonna of the Wasps| 3.7.09 @ 3:48AM
You guys weave such a web of comedy. Hate Hollywood or defend them. Global capitalism will fail either way.
Marc Jeric| 3.7.09 @ 1:37PM
Abu Hussein from Kenya said he would raise capital gains taxes "for fairness". Well, Stalin did that to perfection - he nationalized everything and sent the capitalists to the gulag. Now - that was fairness! "Expropriate the expropriators"! Marx now or never! I think we should not negotiate with our commies - they should be lined up against the wall and.... Or else they will do it to us.
Madonna of the Wasps| 3.7.09 @ 9:31PM
Allow me to clarify further. Capitalism will fail and be replaced by a socialist government, similar to thise of eastern European nations. Americans will finally experience the pleasures of a living in a society free of motivation, ingenuity, and altruism. We can all wait for a train that is two hours late for a 35 minute ride into Budapest. The train is regularly irregular , so oh what surprises when it does arrice. Perhaps we could live in Kenya! Oh such joy! There are no trains, not even buses, and we can either walk or get dragged by a passing overload car to our final destination. Capitalism is filled with eveil and suffering. Why just look at immigration to the United States....
Skep41| 3.8.09 @ 11:27AM
How long is it going to take for the people like Baldwin, who owe their wealth and prominence to a free economy, to realize that dismantling that economy impoverishes them? Wall Street, which was more or less pro Obama, has suddenly started sounding like Rush Limbaugh, or even more so. Witness Jim Kramer, the largest donor to the Dems in 2006, screaming and waving a portrait of Lenin on his show. The professional class, still smug in the platitudes they absorbed at their 'elite' universities, will have are their pat certainties ripped up and thrown in their faces by the gang of hatchet-faced fanatics who have seized power. I live in the belly of the Democratic beast in Los Angeles and I can tell you that the buyer's remorse is there and growing as rich DINKS realize that the phat retirement that they decided to not have kids for has just evaporated in front of their eyes. They never expected 'Change You Can Believe In' would affect them. The Baldwins of the world are going to be yelling real loud as their position deteriorates. Film production is not going to flee to California or Utah or Katmandu...there is just going to be a lot more of it. Baldwin's income will shrink, the taxes that he pays on what he gets will double and things that he buys with what he has left will cost twice as much because of the added taxes priced into them. Lets see how bad the 'rich' want to save the planet then.
skep41| 3.8.09 @ 11:28AM
"Film production is not going to flee to California or Utah or Katmandu...there is just going to be a lot more of it. "
I meant much LESS of it!
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