81–90 of 369 posts
Since it didn't get released, they collectively and/or individually might very well bring a civil suit against the company for lost compensation (where compensation is defined as some combination of cash and reputational gains, and this latter part became zero).
Seems like a less controversial solution would be to allow the same tax write-off if the studio releases the film for free distribution (e.g. via the Internet Archive), either into the public domain, or under a license like Creative Commons Noncommercial if there's concern about implicitly allowing derivative works by competitors or similar.
I think the tax writeoff should only be available for doing something like that. It's insane that corporations failing at ventures is so incentivised that they'll fail on purpose, and we shouldn't be offering tax breaks for behavior that serves no public good This kind of law is especially offensive in the context of rhetoric about social programs, wherein we create all sorts of onerous means-testing on the logic tha…
I believe the argument is that businesses would take less risks without the security provided by those tax write-offs. Presumably the increased tax revenue from businesses taking risks and having success outweighs the tax losses from risks taken, failed, then written off.
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It's not "robbing the people paying taxes" because the money was never theirs to begin with. Taxes are paid on profits, and if profits are not made they're not owed. Suppose I make a painting worth $1000. If I had sold that, I would have been required to pay taxes on that at the marginal rate, say 40% so $400 worth of taxes. Instead of doing that, I set it on fire. Does that mean I just robed taxpayers of $400?
It feels like tax fraud. Given that it is apparently not possible to prove that they deleted the movie, it seems like the IRS should assume that they still have the movie. I bought a stock share for $1000. I wanted to sell it for $2000, but no one was willing to pay more than $400, so I decided to tell the IRS that it was worth zero and take the full tax write off (which was tax fraud). On top of that, refusing to re…
Even if they didn't delete the movie, the fact that they claimed to have deleted the movie and used it as a tax credit basically makes the value $0, because in the unlikely event they have a copy around, they wouldn't be able to sell it without having all of the profits seized from them.
The contrary argument, that a creator has the right to destroy their creation, is made in the Gary Cooper movie "The Fountainhead" (1949).
Ah, the work of fiction based on an Ayn Rand novel? Considering I'm operating from a very different set of values than she was, I doubt I would find the movie particularly persuasive.
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> That they actually incurred the losses they claim to have incurred, so they get a tax break. The taxpayer is defrauded. Did they not incur such losses? Did they claim to delete the movie but actually kept a backup? Granted, the loss is self-inflicted, but that's not a relevant factor in the tax code.
If I burn down my house and claim insurance or tax losses, they’ll laugh and send me to jail. Explain how a corporation doing the effectively the same thing should get a write off. It’s a sham.
It just tells you when you have to pay and when you don't have to pay. If they didn't explicitly write in that you're not allowed to burn a movie, then burning a movie gets you a tax break. End of.
Where do you draw the line? If an artist pays a model and paints her, is the artist to be prohibited from destroying the painting because it sucks, and because the model wants credit? What about a music producer who pays a studio band to record a song that turns out to be terrible -- is the producer prohibited from deleting it? It's the tax write off for destruction that's fucked up, as @cnees says. Failures are part…
> is the artist to be prohibited from destroying the painting Perhaps not prohibited. But we could make it so they lose all IP rights. Copyright is intended to promote the creation and distribution of new works. It is not a natural human right, like ownership of your physical things.
If they're actually destroying all copies as claimed, then IP rights is irrelevant.
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Where do you draw the line? If someone buys the Mona Lisa and burns it for the tax credit, is the owner to be prohibited from doing so based on the public interest?
If I pay 25% marginal income tax and I make a profit of 200 million dollars, I get to keep 150 million. If instead I decide to buy the Mona Lisa for 200 million dollars, and burn it I walk away with nothing but the satisfaction of not have given one cent to the government. Please tell me how my evil mastermind plan to burn the Mona Lisa works anyway?
Better analogy: you buy a big museum collection that contains some lost Rembrandt paintings, widely regarded as his worst, but still considered valuable because it's Rembrandt. You think you might have a hard time selling them, so you look up their original purchase price and find that it was $1 million, so you burn them instead and claim a $1 million writeoff, for a guaranteed $250k decrease in taxes for essentially 0 additional cost, resulting in $250k of extra profit.
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> That they actually incurred the losses they claim to have incurred, so they get a tax break. The taxpayer is defrauded. Did they not incur such losses? Did they claim to delete the movie but actually kept a backup? Granted, the loss is self-inflicted, but that's not a relevant factor in the tax code.
The deductible losses are supposed to be incurred in pursuit of profit. Not every expense a business incurs is tax deductible. Not even trying to sell it calls into question whether it was in pursuit of profit. They’re expecting the American tax payer to make up the shortfall and that’s likely based on Hollywood’s unique accounting practices, which has a tendency to inflate the claimed expense amount.
True, there are multiple reasons why some expenses aren't deductible, but AFAIK no such exception exists for "intentionally destroying it".
>and that’s likely based on Hollywood’s unique accounting practices, which has a tendency to inflate the claimed expense amount.
See my other comment here: https://news.ycombinator.com/item?id=39339493
There's no way that you can save taxes by doing this.
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Destroying a movie to claim the tax break is analogous to burning your house down for the insurance money or to claim a casualty loss. Yes, you really did lose your house. No, you are not entitled to claim it as a write-off.
>insurance money That's fraud because the insurance policy specifically says it won't pay out if you intentionally set it on fire. If you actually did set it on fire, then claimed that you didn't then that's the deception. >No, you are not entitled to claim it as a write-off. Can you point to the relevant tax law that prevents this?
A fire if you willfully set it, or pay someone else to set it.
A car accident if your willful negligence or willful act caused it. The same is true if the willful act or willful negligence of someone acting for you caused the accident. Progressive deterioration (explained below). However, see Special Procedure for Damage From Corrosive Drywall, later.”
https://www.irs.gov/publications/p547#en_US_2023_publink1000...
Commenting before I've read the article: That's ridiculous. There's no obligation for anyone to bring something to market regardless of how far along it is. After I read the article: Still not persuaded. It reads like motivated reasoning, the person doesn't like things not getting released and says that governments should step in. There's some mention of taxes and lost work, but nothing tht holds water. As an example…
The argument isn't that WB shouldn't be able to scrap projects. The argument is that the tax break for doing this is bad and should not exist
Aside from the reputation hit I mentioned, the unreleased film might have some neat ideas they want to recycle into another, better project.
There's a case to be made that we should eliminate tax breaks for all "R&D" work, but this article doesn't persuade me. It reads like it was written by someone who'se unhappy that they're work won't see the light of day, which I get. I've developed several products that at the last minute the exec team decided wasn't worth the capex to tool up...it's just a part of the game.