Motion Picture Herald (Jan-Mar 1932)

February 27, 1932 MOTION PICTURE HERALD 29 GENERAL SALE TAX WOULD EASE PROPOSED BURDENS ON INDUSTRY Hint of Move to Restore Assessment on Film Rentals But Officials Admit This Levy Would Not Yield Over Ten Millions By F. L. BURT, Washington -With the fate of a proposed tax on admissions still undetermined, the industry faces another taxation yoke in the form of an assessment on rentals. Exploring every avenue of taxation in the effort to raise $1,250,000,000 necessary to balance the Federal budget, members of the House Ways and Means Committee obtained this week from the treasury department estimates of the revenues which would be derived from return of the war taxes, including the levy on film rentals. While details of the amounts which could be raised by return of all of the so called "nuisance" taxes of a dozen years ago are being kept confidential, it is admitted that the revenue from motion picture rentals would probably not exceed $10,000,000. Not Agreed on Admission Tax Indications that members of the committee are not agreed as to the advisability of cutting the exemption on admission taxes from $3 to 10 cents are seen in the request that the treasury estimate the revenues which would be derived, respectively, from exemptions of 35 cents and 50 cents. Twothirds of the revenue would be lost by moving the exemption as proposed from 10 up to 35 cents, the figures are understood to show, and probably $25,000,000 or $35,000,000 would be obtained from a 50-cent exemption. Development of a tax bill which will raise $1,241,000,000 without imposing a tremendous hardship upon the people is a "nightmare," according to leading members of the Ways and Means Committee. Recent developments have indicated that the imposition of a general sales tax is gaining favor. This tax would be imposed upon manufacturers, so as to prohibit "pyramiding," and it is believed as much as $600,000,000 could thus be raised. Still Would Fall Short Even with a general sales tax, which, of course, would not apply to necessities of life, and with increased income rates for individuals and corporations, there would still be the necessity of raising several hundred million dollars in other ways, and the opinion prevails that an admission tax would be included in the miscellaneous levies designed to round out the bill. Officials of the treasury department, asked to make new recommendations as an aid to the committee, have stuck by their original program, including the 10-cent admission tax exemption, and insist that income tax raises shall be made retroactive and that postage rates shall be increased. The committee has definitely refused to make any of the taxes retroactive and there BULLETIN! Prior to leaving New York for Washington, Charles C. Pettijohn, one of the leaders in the fight against admission taxation, reported the expectation that the House ways and means committee would report on its revenue program, including admission phases, late this week. is little or no possibility of securing an increase in postage rates at this time, so that it is necessary to make up something over $200,000,000 by other taxes. It is now generally accepted that the corporation income tax rate will be increased from 12 to 13 per cent and that the present exemption of $3,000 allowed corporations with taxable net income not exceeding $25,000 will be reduced to $2,000 for corporations showing not more than $10,000 taxable income. Individual normal tax rates will be two, four and six per cent, instead of ly^, three and five per cent, as at present, and exemptions are likely to be reduced from $1,500 to $1,000 for single persons and $3,500 to $2,500 for heads of families, while surtax rates, now having a maximum of 20 per cent, will be rewritten to give a maximum of 40 per cent on income in excess of $500,000. $3,000,000 Suit Filed on Coast Virgil C. Crites, who claims to be the first inventor of certain principles, devices and methods covering use of photo-electric cells in conjunction and in connection with thermionic amplifiers and protection from and against external electrical disturbances, has filed suit in U. S. district court at Los Angeles for $300,000,000 damages from all important film company and theatre circuits. The inventor claims he first invented the electro cell in 1916 to 20 in association with a professor of the University of Illinois. Rubin Arrives on Coast; Schenck Leaves New York President Nicholas M. Schenck of MGM and Loew's, Inc., will depart from New York for Hollywood on Thursday on a regular annual trip to confer with production officials, Louis B. Mayer and Irving Thalberg. Felix Feist and Howard Dietz will accompany him. In the meantime, J. Robert Rubin, company vice-president, arrived this week on the Coast from headquarters in New York. Industry Defends Aliens In Attack On Immigration Bill The industry on Wednesday presented arguments at Washington against pending legislation subjecting alien actors to the provisions of the Contract Labor Law. C. C. Petti john, general counsel for Motion Picture Producers and Distributors, told the House Immigration Committee that the bill would not improve opportunities for American artists, while it would materially increase the difficulties which are being encountered by our films abroad. "Passage of the bill," he declared, "would seriously affect our domestic' trade by restricting the source and variety of artistic talent upon which we rely for the success of our productions and it would practically ruin our foreign trade by placing almost insurmountable obstacles in the way of foreign production." "If American producers were to continue to make foreign versions of films," he continued, "the bill would compel them to establish studios abroad." Admitting that there is unemployment in the theatrical industry, Pettijohn asserted it is not good legislation to jeopardize the jobs of thousands to provide employment for a few. It is the talent of the individual actor and his value as a box-office attraction which is employed, he pointed out, and if an alien actor is a good box-office attraction he will provide employment for hundreds of Americans. The American picture industry has achieved its present position abroad through the free flow of talent. Today, its supremacy is "more seriously threatened than ever before," he declared, and the producers are also confronted with numerous economic problems with regard to foreign trade. Wiley to Speck at MPTOA Banquet Is there a definite line of cleavage between the press and the screen ? Do these mediums of expression clash in any way in the American public's mind? Or is there a service mutuality between them ? These questions will be answered by one of the leading newspaper executives of the United States, Louis Wiley, business manager of the New York Times, at the national convention of the MPTOA to be held at the Mayflower hotel in Washington March 14, 15 and 16. Mr. Wiley will speak at the convention banquet Tuesday, March 15. At this event will be many United States senators and congressmen. Many leading stars will be there and two leading humorists, Eddie Dowling and Con. McCole.