One of the reasons why I like the idea of a “flat tax” is that, by sweeping away all the existing loopholes, it removes a whole group of people who have a vested interest in pushing for special treatement from the Inland Revenue and instead creates a simpler system that is far easier to run, less distortive of economic activity. As a libertarian, of course, my main aim is to see the overall burden come down rather than be flatter; the flatness of the tax code is not, ultimately, as important as its weight.
One of the groups that have managed to chisel a tax break out of finance minister Gordon Brown is the domestic film industry. Apparently, the End of Civilisation As We Know It may possibly be arriving soon if we no longer make movies in England. It is all tosh, of course. Many British actors, directors, producers, technicians and photographers work all over the world, very successfully too. While financed with U.S. money and so forth, many of the biggest hits in recent years have had strong British themes, such as the Harry Potter series, and even the latest James Bond movie.
Boris Johnson has a nice article demonstrating the absurdity of trying to define what is a “British” film for the purposes of qualifying for tax treatment. Just get rid of these loopholes and focus on cutting taxes across the board, Boris. And please do inform your statist-minded Tory leader, David Cameron, about that aim.
No. Little Britain MUST be subsidized! It’s the only decent thing to come out of the UK since Mr. Bean (Joking!)
Surely flatter is less partisan, less distorting, less biased? Once it is flatter, it can come down as it is manageable and far cheaper to administer. A lower, complex tax, still wastes a greater proportion on unneccessary State meddling, admin and engineering via tax codes than a flat one.
From what I gather from the Habits of Successful Nations, it is Rule of Law that is key, and part of that is to remove the bias towards groups and the lobbying (read: corruption) that it brings. That to me indicates that it may be flat tax first, low next. From a pragmatic point of view, it makes sense too. Simplify then reduce. If you reduce while complex, you have a nasty job to balance interests as you do it, and then you still have the struggle to flatten afterwards – you do the work twice.
This is why I think the UKIP plan appears sound.
As far as I can tell a “British film” is one that trashes the average Briton (at any time in history) by making them look racist, small minded, petty and snobbishness. If it plays into the intelligensia’s “white guilt” mentality then its a British film. Oh or it makes the British out to be buffons.
BTW speaking of funding…aren’t you glad that your TV tax went to pay for the direly unfunny Jam & Jerusalem?
Hollywood’s lawyers and accountants are marvellously good at using the loopholes in these types of things offered by foreign governments to fund Hollywood movies with little if any actual connection to the country in question, too. Their favourite tax concession was a German one, use of which had grown to the point that a few years ago approximately 10% of the *total budget* of Hollywood films for the year was being paid for by the German government. The rules have been tightened up now, much to the annoyance of Hollywood.
The German law defined a German film as being one made by a German corporation with few other requirements, and the tax concession was collected ahead of production. A (German) shell company would be set up to produce the film. German investors would invest in the company, collect the tax concession, and then lease all rights with an (inevitably exercised) option to buy down the line back to the studio for the amount put in by the Germans minus most of the tax concession. In return the Hollywood studio had effectively received a large cheque from the German government in return for nothing whatsoever.
It is unlikely that the new British rules are as easy to expoit as this, but these sorts of things *always* end up being a subsidy to American film studios. The question is just how big a subsidy.
Haha, Michael. Despite harbouring a broad distate for the Hollywood establishment, I still find that quite amusing. I wonder if the po-faced German art intelligentsia realised their precious state film subsidies were more likely to be bankrolling Runaway Bride than Run Lola Run.
TimC beat me to it. The thing that struck me the hardest in Brian Micklethwaite’s interview was how surprised the author was (and me) that overall tax load was not a significant determinant. However, IIRC consistiency in the legal environment was the number one factor.
The rest of what TimC said makes sense, also.
Let me see…
We need tax breaks to encourage people to make films in Britain. These are to be paid for by taxing people who make computer software, or steel, or chemicals, or cheese, or anything else, such as a profit.
Exactly how does this benefit the rest of us?
Up to a point, Andrew. There have been some decent films set in Britain, involving Brit money, such as The Full Monty, Dawn of the Dead, Gregory’s Girl (which I thought was great), and some others. The first Richard Curtis film, Four Weddings, I quite liked although the rest of them are a bit cringemaking, particularly the horrendous Love Actually.
Jonathan,
You liked Four Weddings?
Fucking Hell!
In general,
We generally make worse films than we used to because since all this crappy money came in from Gord’s piggy-bank the film-makers seem to be under some kinda bizarre obligation to make “British” films with “British” themes and specifically “British” settings (the more identifiably regional the better) – think Purely Belter, Twin Town, East is East and many, many others.
There is a place for local colour in a movie but all the good ones also tap into something universal. Sadly we haven’t been doing that too much in this country recently because the production market has been thoroughly distorted. Westerns are very specifically set in a certain time and a certain place yet they are hugely globally popular because they touch something universal. British film making should aspire towards something like that. The Full Monty had the local colour of 1980s Sheffield yet was roaringly successful overseas. Why? Well, when it opened as a musical on Broadway they’d transferred the setting to Pittsburgh and it still worked.
The script is the key. If you’ve got a good story and good dialogue you’re half way there. If you haven’t, no amount of brilliance in acting or direction will rescue you. Since we started subsidising film production. quite literally by the metre, scripts which should have seen the waste-bin have started up turning up in the multiplex (albeit briefly).
We have to make films that aren’t parochial and we have to make films worth making – not just to fulfil what essentially amounts to a quota.
Brian,
Of course. Why should one industry gain at the expense of another? Having said that, the UK film industry hardly compares with the epic money pit which was Rover.
Despite his dubious taste in movies I think Jonathan made a very good point about tax which is not only flat but bereft of special interest groups pleading for extraordinary concessions.
Absolutely spot-on. I do so deeply loathe such movies as Notting Hill (especially having worked on it), Four Weddings And A Funeral and that genre of twee, buffoonery-type Hugh Grant movie that even Working Title have now thankfully decided not to promote any more and which I presume is now causing Emma Freud and her husband Curtis to fret.
From my own perspective (20ish years in the movie industry) I still fairly and squarely blame the reason for the money moving away on BECTU and Equity. As much as I realise that blaming unions is very much of a cop-out (they are, after all, a self-interest group), in this case I believe it to be justified. The massive 1990’s resurgence of the UK film industry happened pretty much as a result of increased union muscle-flexing in Hollywood and in New York (remember the SAG strike in 1997?), something that the Weinstein brothers (Miramax) were not prepared to put up with and thus they led the gradual relocation of prime titles to London. We now seem to be repeating the same mistake that unions made in the USA, leading to studios looking to as far afield as New Zealand (LoTR series, all remaining Narnia Chronicle series etc), Australia (new Superman movie series being shot in Sydney), Czech Republic (Bond and a whole raft of other minor movies like Underworld 2 etc.) and lots of other countries. In fact the last Bond movie had only one scene completely shot in the UK, the opening one involving the chase through the building site, which was filmed at Denham. Pinewood, for so long complacent about its 007 sound stage, was used for some very minor work and the “world’s largest sound stage” didn’t get used this time. Regardless of this doom and gloom just about every British studio is still fully booked up for some time to come, tax break or no tax break, so I wonder if the saying that “commerce prospers when government stands idly by” should be the motto of the day. Far kinder and better to the industry to tell it to sort itself out and deal with the increased militancy of BECTU first, which I fear Labour would never do, rather than throw money for nothing grants and meaningless tax breaks at them.
Nick, well I liked the film. Those best man speeches still make me laugh out loud. “I am so glad that X and Y got married because all his previous girlfriends were such dogs, and it is a pleasure to see so many of them here today.”
Brian, no it does not benefit the rest of us. It is not meant do do so. It benefits all the various luvvies and sundry entertainment industry tossers who tend to vote Labour, support ever-growing statism, etc. It’s the Pinters, the Alan Rickmans, and all the rest of them.
>There have been some decent films set in Britain, involving Brit money, such as The Full Monty,
Oddly enough, no, or at least not that one. The Full Monty had a small amount of British seed money from Channel 4, but the producers then sold the film to 20th Century Fox, which financed and oversaw the production. Despite the fact that The Full Monty was positioned in the market as a plucky little British film, it was actually a Hollywood studio production. It then had the advantage of the full support of 20th Century Fox’s distribution and marketing arm at a very opportune moment, which was in autumn 1997, just a few months before Fox was to release Titanic. Cinemas really, really wanted to be able to show Titanic, and were thus very receptive to any other films that Fox wanted to book. Thus The Full Monty got a very wide release in multiplexes throughout the land, which it never would have if it had actually been the small British production it pretended to be. Fox also marketed it beautifully. When the film did become a big hit and got close to breaking the record British box office record (which it ultimately held for a month or two before Titanic came along) they ran a delightful “Go and see it again so that the record will be held by these plucky little Brits rather than some soulless Americans” campaign.
None of this ensured that the film would be a hit – what ultimately did that was that it was a good film that audiences loved. However, if the film had British funded and distributed it would almost certainly have been a hit on a smaller scale.
“..sweeping away all the existing loopholes, it removes a whole group of people who have a vested interest in pushing for special treatement “
Ah, but all these loopholes, treatments and such are jobs. Somewhere, someplace somebody pays the bills with these jobs. Not to mention an entire class of people who find ways around all this for you.
I am reminded of what now passes as law. Here you have some minor criminal, for example a kid with pot. He has his low rent lawyer at $200/hr, the prosecutor is good for a steady $80/hr, the Judge say $100/hr, plus bailiffs, janitors, building supply salesmen, law book publisher all together running at a rate of say $300/hr. So, the poor stoner with a hundred dollars of pot supports an industry of $680/hr. By the magic of state power, a day dreaming wastrel is, though little effort on his own, able to turn $100 into $700. Every day! I’d like to see private enterprise top that!
Naturally if there were more complexities, there would be more industry. Flat tax, limited state powers would be ruinous.
Once upon a time Britain taxed the money generated by foriegn films (or other businesses, I would guess) when that money was taken from the country. This was what inspired Disney to do film production in England, resulting in those live action films starring Haley Mills which could then be exported untaxed. This policy encouraged filmmaking in Britain without taking money out of the British economy.