A Modest Proposal: A Luxury Tax for Expensive Movies

06/24/2011 08:12 am ET | Updated Aug 24, 2011

Here's an idea I've suggested before -- but this seems like a good time to suggest it again.

Let's create a luxury tax for Hollywood, comparable to the one Major League Baseball invokes whenever a team tries to buy itself a pennant by stocking up on expensive star players.

Except, in the case of Hollywood, this would be a tax that Hollywood would charge itself every time it makes a movie that costs $100 million or more. There would be a tax of X amount of dollars -- let's say 10 percent -- for every $10 million over the $99-million mark a movie's budget goes (and I'm including the cost of advertising and marketing, which can double a movie's pricetag). And we'd round up, from $101 million.

That money, in turn, would go to a not-for-profit fund to help underwrite less affluent artists. It could be used for grants for low-budget independent films. Or perhaps -- given Hollywood's reputation as a hive of liberalism -- it could be earmarked for the National Endowment for the Arts, which always has a bulls-eye painted on it by conservatives, targeting it for elimination.

Because, really, it's unconscionable to spend that kind of money on a movie -- particularly the kind of movies that kind of money gets spent on. The best movies, with very rare exceptions, don't need hundreds of millions of dollars to tell a good story, create memorable characters and move the chains of the cinematic art. Sure, the directors of The Hurt Locker or The King's Speech would tell you they could have used more money to buy more time for themselves -- but working within limits obviously paid off.

Instead, that kind of money gets spent on Green Lantern ($200 million just for production) and Transformers films ($200 million-plus for the new one), to pay for the kind of hard-drive memory and computing power that was unimaginable a decade ago. It pays overpriced movie stars and overstaffed crews, perks and per diems and all of the other stuff that never shows up on the screen -- or the kind of stuff that just spells excess, like explosions, car crashes and other forms of demolition. Those are budgets which, in themselves, far eclipse the pittance that the NEA gets each year from the U.S. government.

So why not create a system to turn that kind of waste into something productive? Besides funding small projects - or state arts councils that help local artists survive and work - it could be used to, let's say, start a nonprofit chain of arthouses. These could provide the kind of exposure that too many deserving films never get, while actually paying the filmmakers for their time and enough to cover the cost of their productions.

Or here's a really crazy idea: The money could be used to fund education or health care or renewable energy. It just seems more symmetrical to suggest using it to fund the arts, including lower-budget films.

These are troubled economic times, with a lot of people feeling the financial pain. The problems were created by the cost of unnecessary wars and administrations that drove the economy into a deep, deep hole by cutting taxes for the wealthy.

Of course, that doesn't stop Republicans from trying to politicize the deficit and exploit fears about it for their own dogmatic ends. It doesn't stop the New York Times from giving a rave review to a restaurant like Masa, where a prix-fixe dinner for plutocrats costs $450 per person. (Yes, I know; he dropped it from four stars to three. Let's not split hairs.)

And it doesn't stop Hollywood from doubling-down on the comic-book and special-effects movies, figuring you've got to spend money -- lots of money -- to make money.

So let's change the economic model, by making it more expensive to make more expensive movies. There's no excuse for this kind of runaway spending to make empty-calorie entertainment. Let's see Hollywood have the gumption to own up to the problem and step up to help solve some other problems at the same time.

If it sounds like a good idea, it's because it will never happen. And that's free-market capitalism in action.

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