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The King in his Realm hath two superiors: God and the Law. -- Henry Care (1646-1688) on English liberties and the Magna Carta


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Ancient History

|eCOnoMICS | Prudence Potpourri

Flashback: Big Movie v. Tax-Happy Congress

The debt ceiling negotiations are falling apart because Obama and the Democrats are demanding tax hikes—and not just tax hikes on “the rich,” which includes thousands of small businesses, but also on corporations—instead of solving the reason why we have such a debt crisis: Washington can’t stop binge spending and making promises to spend even more.

A couple days ago, Glenn Reynolds, aka Instapundit, suggested Republicans ought to propose tax hikes on a solidly liberal industry and listen to the ensuing squawking of the plucked chickens:

WANT NEW SOURCES OF REVENUE? If I were a Republican member of Congress, I’d be proposing big excise taxes on movie tickets, DVDs, CDs, digitial movie and music downloads, etc. Then let Hollywood scream about how the tax increase would destroy American jobs. . . .

The Professor might not be aware that Congress already tried it before, and it nearly destroyed Big Movie. It’s a prime example of how Washington’s insatiable thirst for money ruins private industry, eliminates jobs and ultimately, reduces the amount of tax revenue they would have received if they would have just left everyone alone.

Amazingly, Big Movie suffered under a heavy tax burden for six long years before they came out fighting with this excellent piece of propaganda in 1953:

After WWII, Congress was hungry for money, and they slapped a 20% admissions excise tax on the gross revenues of movie theaters. (That’s skimming right off the top before anyone else gets paid.) As illustrated in the film, this had an immediate and pernicious effect on the industry, just as they were struggling to learn to compete with the burgeoning television industry.

When they’d finally had enough, they produced this film. Note how they call out to individual Congressmen and cite how many lost theaters they have in their districts. [Rep. Dingell! That Michigan district has never learned.]

Got to love the humble “picture exhibitor” that details his meager salary in comparison to the excise tax being taken right out of the mouths of his family. The widow struggling to keep the theater going after her husband died.

The whole film is filled with folksy, down-to-earth people no central casting could ever find. Just good folks wanting to run their business without having to carry Washington on their backs.

Now when you hear your congressman or Senator or President talking about how certain industries deserve to have to pay more, think of this film and all the real-life people down the line that those new taxes are going to hurt.

Update 7/23/11

Welcome, Instapundit readers! (Thanks for the link, Professor.)

Update 7/18/12: The eagle-eyed and tax-adverse Professor Glenn Reynolds, aka Instapundit, called it to my attention that the above video had been removed. After a little research with the ever-excellent Media Research Center, I found the removal was due to a technical error. MRC quickly restored the video so we can once again shine the bright light on the “unintended” consequences of congressional meddling in business.

(Special thanks to Stephen Gutowski, aka @collegepolitico, for his help. MRC does great work—not only in keeping an eye on American journalism, but also in offering a video service alternative to YouTube and its evil overlord Google.)

11 comments to Flashback: Big Movie v. Tax-Happy Congress

  • Peter S

    The Rep. Dingell mentioned in the film was the current Rep. Dingell’s father, John D. Dingell, Sr. The current Rep. Dingell took office Dec. 13, 1955 (according to his Wikipedia entry). Your comment
    “Rep. Dingell! That Michigan district has never learned.” is
    not quite accurate.

    • Prudence

      Thanks, Peter. I should have been more clear in my aside. You are entirely correct. The Dingell the narrator mentions in the film is indeed Dingell Sr. My comment was referring to the fact the district has been represented by Dingells for over half a century—and with atrocious results.

  • At 17:40 or so, there’s a scene of a TV in a bar, demonstrating the threat of untaxed rivals. Check out the bartender, and tell me that’s not one of the greatest radio actors of all time: William Conrad.

    Probably a clip from Dial 1119, a 1950 film n which he played a bartender.

    Great piece of history – thanks for posting this.

    • Prudence

      oh how disappointing my DVR decided to hiccup during that segment. there may have been more of him in the missing footage.

      You have quite an eye for *radio* actors! (I only knew him from TV. But I see that he also did a lot of narration for TV shows–a perfect role for a radio man. I never knew he was the voice of Matt Dillon in the original “Gunsmoke” radio program! I’d love to hear that today.)

      I think you may be right about the movie. IMDB lists him as playing “Chuckles” the bartender. Their summary of the film:

      A former mental patient murders a bus driver, then takes refuge in a bar, where he holds the patrons hostage.

      While I own volumes 1 through 4 of the Film Noir series, I unfortunately never got volume 5, which includes this film; otherwise, I’d post a longer clip of it for you. (I’d love to see what was really playing on the TV, if anything.) Hmmm…Amazon’s description of it makes it even more intriguing (note the description of the cast!):

      Dial 1119 (1950), the closest MGM ever came to minimalism: a low-budget suspense film with a no-name cast, a new director, and action centered on a saloon where, for about an hour of real time, an escaped mental patient (Marshall Thompson) holds six citizens of Terminal City hostage. Gerald Mayer’s direction is eerily flat, which adds to the odd little movie’s spell.

      They cut Conrad out of the trailer entirely. It even says 5 hostages, not six:

  • Great story on movie excise tax. It set me off to research the history on my own. Google has gret archives and Billboard magazine covered it extensively. Turns out that entertainment in all forms was a favorite target of the taxman. However your comment on Dingell my be off base – it turns out that he was one the first to author bills to repeal the excise tax.
    Link here:

  • correction to my comment

    It looks like it was Dingell Sr. who introduced the bill. At the time, these excise taxes were characterized by Dingell Sr. as taxes on the “working class”. He also advocated repeal of excise taxes on cosmetics. Reading contemporary papers covering the issue suggest that the lingering war deficits of the early fifties ignited many legislative battles between social liberals, who advocated higher corporate taxes on “excess profits”, and Republicans who argued that lower taxes on business produced higher growth and higher tax revenue. Dingell Sr died in 1954 and was replaced by his son so I suspect Dingell Jr picked up the cause.

    Interesting. The more things change…

  • Lydia

    Hello Prudence: This film would be excellent for my economics course in Public Finance (Spring 2012). I checked out Turner Classic movies but could not find a way to order this film or a schedule of when it will be released. I’m worried that you may delete it from your site and I would not be able to show the class. I promise to credit and recommend your website to the students for their review if I can show the film.

    • Prudence

      That’s a fantastic idea, Lydia. ALL students need to see it. I’m sorry my DVR chose to hiccup in the middle of it. I’ve only ever seen it once on TCM. It was a filler bit between films. (I’m glad I was recording both and caught it!) I have no plans to delete it here, but if it should ever disappear from the server, just shoot me an email and I’ll upload it again for you.

      What lucky students you have. 🙂

  • Lorraine

    Thanks so much for publishing this wonderful video…how ironic that the excise tax was on the film industry. Which by historical accounts there were a larger number of not only conservative film makers but christian film makers as well in Hollywood before the 1960s. I grew up in in the 1960s/1970s, my family still live there and I visit them frequently and I have seen over the years a definate change to the far left in political views. I wonder if todays film makers would make another film supporting tax relief if they were taxed in the same purportion that we the public are today? My husband and I make far less than 100K a year and we have seen our taxes just since Jan 1st go up considerably ~ and Obama says that he is working to relieve the burden on the so called middleclass? Who is he kidding? By the way…ironic isnt it that the original name of Hollywood was Holywood? And that the area was to be given for a large church to be built?

    • Prudence

      As Hollywood tends to be one of the biggest supporters of government confiscation of private wealth, I’m with you, let’s have the studios, stars and production companies pay up. And if they are going to pay lip service to supporting job-strangling unions, they shouldn’t be permitted to escape to foreign countries to evade union requirements at home.

      Support the little guys, though–the theater owners and the right-wing filmmakers! 🙂

      Thanks for taking the time to comment.

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