Background on the Current State of Hollywood
Hollywood, nestled in California’s heart, is attempting to recover from a challenging five-year period marked by the pandemic, shifts in series and movie consumption due to streaming services, and actor and writer strikes that stalled the industry in 2023.
The Letter to Trump
Leading Hollywood studios and unions have penned a letter to President Donald Trump, advocating for tax incentives to stimulate film and series production within the United States.
This letter comes after Trump’s May announcement of a plan to impose 100% taxes on content filmed outside the US, with the aim of encouraging domestic production.
Key Points in the Letter
- National Approach: The letter emphasizes that reviving US production requires a comprehensive national strategy and political solutions.
- Congressional Action: The signatories propose that Congress develop a tax benefits package to lower production costs in the US and ensure long-term sustainability.
- Global Competitiveness: More than 80 countries currently offer tax incentives for production, causing many potential US-based projects to film elsewhere.
- Job Retention: A production incentive would make the US market more competitive and help retain well-paying jobs related to film and television production.
Current State of US Production
According to FilmLA, an organization studying the industry, less than 20% of movies or TV series aired in the US were produced in California.
Trump’s Proposal and Reactions
Though the letter arrives shortly after Trump’s threats, it does not mention his proposed tariffs on foreign-produced content detailed in a post on Truth Social.
Trump’s announcement struck a chord with an industry grappling with the economic impact of a domestically weakened production sector.
Political Responses
California Governor Gavin Newsom responded with a proposal to collaborate with Washington on a federal tax credit plan allocating approximately $7.5 billion to aid the industry.
Key Questions and Answers
- Who are the key players? The letter was signed by major Hollywood studios, unions, and actors Jon Voight and Sylvester Stallone, who are seen as Trump allies in the sector.
- What tax benefits are being proposed? The signatories suggest that Congress create a tax benefits package to reduce production costs in the US and ensure long-term sustainability.
- Why are tax incentives important? With over 80 countries offering tax incentives for production, many projects are filmed abroad. Tax incentives would make the US market more competitive and help retain well-paying jobs related to film and television production.
- What was Trump’s proposed solution? Trump announced a plan to impose 100% taxes on content filmed outside the US, intending to encourage domestic production.
- How did California respond? Governor Gavin Newsom proposed a federal tax credit plan allocating around $7.5 billion to support the struggling industry.
