Broadcasting Telecasting (Jan - Mar 1951)

Kennedy Outlines Threat To TV TAX HIRES TAX scales will hit hard against the telecaster if Congress adopts a higher overall ceiling on corporate taxes, Means " Commit" ^^^^^^ tee last Wednesday. Mr. Kennedy Mr. Kennedy, who heads TBA's tax committee, spoke during a one-day hearing held by the committee on the excess profits tax law and the normal corporate tax. "Until such time as you gentlemen can work out some effective means of relief for television broadcasters under the recently enacted Excess Profits Tax law, your proposed 70% ceiling means practically all broadcasting companies operating television stations will pay 70% of their net taxable income to the federal government," Mr. Kennedy said. No Privilege Asked Reason why the telecaster would have to pay the full 70% "is because we have no practical average earnings basis or other credits to keep us below that figure," he explained. Points made by Mr. Kennedy included: ^ Telecasters seek no special privilege, for if all corporate taxes are raised "to 50, 55 or 60% you will find no complaint from us." 9 But the TV industry would be forced to pay more in tax obligations than the average and larger corporation in the older and well-established industries because television firms do not have large THERE may be an argument' here for advocates of educational television. Among the most loyal viewers of WFMY-TV Greensboro, N. C, is Elvira, pet of a Pine Hall, N. C, family. Elvira, whose habits exclude her from the living room, watches television through the window. Never misses Howdy Doody, WFMY-TV says. Page 56 • March 5, 1951 mittee by Mr. Kennedy was: "Are average earnings credits to protect stockholders from "the near elimination of income after taxes." ® Much capital invested in TV operations is borrowed money and radio earnings in many instances, were cut during the period of television operation. "Under the Excess Profits Tax law you have taken our earnings by a tax on what obviously are not war profits. You've given us a rate of 62%, that is to say the ceiling rate. Now you are asked to boost that to 70%. Where are we going to get the money to pay our bank loans and other debts? Where are we going to get money to renew our equipment?" Mr. Kennedy asked. Cited as additional problems were (1) the uncertaintity of color television — "color will perhaps produce additional losses for us until there are enough receivers in the hands of the public to make color programs profitable to the advertisers," and (2) cutbacks in monochrome receivers will "drastically CONGRESS last Wednesday was urged to set up a government board to pass judgment on television programs. The censorship request came from Rep. Thomas J. Lane (DMass.), who stepped up to the firing line on the House floor to throw a heavy verbal barrage against the television industry. His target was television programming, which the Congressman blasted as "running wild . . . abusing the hospitality of American homes with lewd images . . . [to] excite those who are underage and distress every decent adult. "In the feverish rush to capture and monopolize attention, video has thrown all standards to the winds." Rep. Lane flatly called upon Congress to "pass legislation that will set up a censorship board within the FCC to scrutinize every telecast in advance, and to cut out all words and actions that arouse the passions, or that hold up any individual, race, creed, group, or belief to mockery and derision." The heavy attack by Mr. Lane was mounted in a 10-minute speech in which he further characterized television as "reckless" and as twisting "by the sights and sounds" the sensibilities of "impressionable" youth "every night in the week." The Congressman's speech began: "Mr. Speaker, we have got TB under control. Unless we do the same to TV, it will break down the moral resistance of our children and kill their characters." Rep. Lane claimed that teachers delay" the development of receiver circulation needed for profitable operation. In developing his argument, Mr. Kennedy asserted that the excess profits law contains no formula to "give adequate recognition to the problem of the broadcasters, both those who have radio and television stations and those who only operate television stations." Danger Cited As he did last November when testifying before the committee on excess profits, Mr. Kennedy cited the danger of larger corporations — "some outsider" of the community — who would seek television licenses when the freeze on applications is lifted. Thus, he explained, the little man would be forced out of the picture because of investment problems. The larger corporation, he said, in the tax position "that can afford to sit out and await more favorable income time," would be on the inside track. The question as put to the comyou going to throttle this all-im portant new art by lifting the ceiling from 62 to 70% and force those I of us who have had to borrow , money and buy equipment on credit to go out hat-in-hand and borrow more money to help pay our debts?" Some committee members expressed praise for Mr. Kennedy's presentation and said privately that if a comprehensive revamp of the excess profits law is undertaken, the television industry probably would be carefully weighed. Hearings on proposed higher excise taxes, including a 15% boost on radio and television sets at the manufacturing level, have been scheduled by the committee for March 7-15. Radio-Television Mfrs. Assn., NAB and other broadcasters are scheduled [Broadcasting • Telecasting, Feb. 26]. NBC Names Rodgers ROBERT R. RODGERS, of the NBC press department, was named last Thursday to the television sales staff of NBC National Spot Sales, succeeding Robert Button, who has joined the television network sales department. VIDEO CENSORSHIP and clergymen "have been fighting a losing battle against the excesses of this one-way form of communication. At last, worried parents are joining with them to demand a clean-up of the 'juvenile delinquent called television' before it ruins itself and debases everybody with whom it has contact." The Congressman's fire coincided with a censure in Boston by Archbishop Richard J. Cushing on "suggestive" television shows, saying the industry was "destined for censorship." The Archbishop in a newspaper article said "it seems too bad that a medium that can accomplish so much has to commit suicide because many of its entertainers are fools enough to throw away their popularity, their fantastic entertaining jobs and their even more fantastic salaries." Many others, he said, "feel the same way . . . about the continual trend television is taking toward 'waste-basket entertainment.' " Refers to Clergy Rep. Lane referred to the Archbishop's article and also to a criticism by Bishop John J. Wright of Worcester, Mass., of a program that "features the telecast of actual wedding ceremonies as a farce which reduces the sanctity of marriage to a ridiculous state. He [Bishop Wright] also deplored the poor taste of a sexy-voiced and hip-twisting torch singer who belongs in a barn, but not on the stage of so many, many living rooms in America." Archbishop Cushing's article ap Urged in Congress peared in the Boston (Mass.) Sunclay Advertiser Feb. 25. The Congressman reminded that "television can become a blessing, instead of a curse, if its tremendous influence is exercised for good rather than evil. It can give distinguished service to the vital needs of entertainment, education and religion at will. "We have waited for TV to show some signs that it is growing up to its responsibilities. Instead, it seems to be plunging down to the primitive state of nudism and the manure pile." Rep. Lane in discussing ways to keep "embarrassing or shameful surprises" out of the living room, said: "We can find the answer ... by controlling and regulating TV pro-, grams in the public interest. They must be filtered and really screened before they are permitted to go before the cameras. For once they leap from the receiving set uncensored, the damage has been done that is beyond repair. "The federal government must step into this mess and clean up the house of television so that its occupants will not track any more dirt into our homes. The broom to do this is a Federal Censorship Board. And spring-cleaning time for TV is the next program on the . schedule." Rep. Lane told Broadcasting • Telecasting that he plans to introduce a bill in Congress to set up a censorship board if there is lack of initiative in either the Congress, itself, or in the FCC. Telecasting • BROADCASTING