A great David Kocieniewski piece in the New York Times makes the case for corporate income tax reform by looking at the extremely cushy tax treatment of the video game industry:
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.
Because video game makers straddle the lines between software development, the entertainment industry and online retailing, they can combine tax breaks in ways that companies like Netflix and Adobe cannot. Video game developers receive such a rich assortment of incentives that even oil companies have questioned why the government should subsidize such a mature and profitable industry whose main contribution is to create amusing and sometimes antisocial entertainment.
The deeper issue isn’t just that we don’t need a special subsidy for video game production, we really shouldn’t be offering special tax subsidies for any line of business. The idea of the corporate income tax should be to raise a little revenue without distorting investment priorities or spurring executives to spend a lot of time thinking about manipulating the tax bill. Absent all these various loopholes and deductions, it would be simple to get the revenue we need with a low tax rate, and it’d be mission accomplished.
Previous in TP Yglesias
By clicking and submitting a comment I acknowledge the ThinkProgress Privacy Policy and agree to the ThinkProgress Terms of Use. I understand that my comments are also being governed by Facebook, Yahoo, AOL, or Hotmail’s Terms of Use and Privacy Policies as applicable, which can be found here.