« Shopping apps that give back. | Main | 46.2 million Americans now live below the poverty line. »

An article in yesterday's NY Times began this way:

The United States government offers tax incentives to companies pursuing medical breakthroughs, urban redevelopment and alternatives to fossil fuels.

It also provides tax breaks for a company whose hit video game this year was the gory Dead Space 2, which challenges players to advance through an apocalyptic battlefield by killing space zombies.

Those tax incentives -- a collection of deductions, write-offs and credits mostly devised for other industries in other eras -- now make video game production one of the most highly subsidized businesses in the United States, says Calvin H. Johnson, who has worked at the Treasury Department and is now a tax professor at the University of Texas at Austin.

In an era where we're supposed to be worried about deficits, the following jumped out:

All told, the federal government gave $123 billion in tax incentives to corporations in 2010, according to the Joint Committee on Taxation, with breaks for groups and people as diverse as Nascar track owners, mohair producers, hedge fund managers, chicken farmers, automakers and oil companies.

So if you ever wondered what is really supporting all of those lobbyists and fundraisers, it's that $123 billion industry in Washington, D.C.

Sure, some tax incentives make sense. But what makes sense about subsidizing video games?

Many tax policy analysts say the breaks for the video game industry -- whose domestic sales of $15 billion a year now exceed those of the music business -- are a vivid example of a tax system that defies common sense. Most times, subsidies begin as a way to nurture a fledgling industry that will not be profitable for years or to encourage a business activity deemed to have a broad benefit to society, like reducing pollution or improving public health.

But it's a lot easier to create a tax break than to eliminate it. That leaves a generous assortment of tax incentives available to all types of companies, like Electronic Arts, with skilled accounting departments.

Read on if your stomach can take it.

Name (required)
Email
Website
Remember personal info? Yes   No
Comments

home | music | democracy | earth | money | projects | about | contact

Site design by Matthew Fries | © 2003-23 Consilience Productions. All Rights Reserved.
Consilience Productions, Inc. is a 501(c)(3) non-profit organization.
All contributions are fully tax deductible.