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.
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.)