Monday, January 7, 2013

How Walt Disney Cashes In on Corporate Welfare



Despite the illustrious international influence enjoyed by Mickey Mouse and the Disney Empire, it could not have been possible without substantial help from Uncle Sam.

The Mickey Mouse Tax Credit, but not the only company receiving tax credit.

According to the latest lobbying disclosure report submitted to the Senate, lobbyists for Disney pushed to extend millions in federal film credits in the final spending and tax deal adopted by Congress Jan.1, hidden among hundreds of other “tax extenders.”

These deals carve out specific tax incentives to favored industries to boost economic growth.

The film credit, first introduced in the American Jobs Creation Act of 2004, allows production companies to deduct the first $15 million in filming costs from taxes, $20 million if the project is completed in a low-income community, according to the IRS.

In 2010, Disney received $110 million through the federal tax credit, nearly 75 percent of the total $150 million allocated by Congress.

The only requirement for receiving the tax credit is completion of a production project in the United States, whether it is a movie or television show. Each episode is counted as a separate production.

The tax credit was originally set to expire in 2005, but it has been extended with virtually every large bill of the past decade, including the relief bill for Hurricane Katrina and the Bush-era tax cut extensions of 2010.

President Obama signed the fiscal cliff deal Jan. 2 by autopen, an electronic device used to mimic his signature when he is away from Washington, D.C. The law will extend film tax credits until the end of 2013.

According to Disney’s lastest financial report, it received $183 million through the film tax credit in 2011, for its movies and shows, an amount projected to exceed $200 million in 2013.

These tax credits make up more than a quarter of the total $718 million in public dollars the Walt Disney Co. received from federal, state, and local governments in 2011, when the company generated more than $40.9 billion in revenue.

Remember Disney is not the only company receiving tax credit.

Read More: http://reason.com/archives/2013/01/06/how-walt-disney-cashes-in-on-corporate-w



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