Videogame Tax Credits Hurt the Economy

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Videogame Tax Credits Hurt the Economy

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The New York Times reports that making videogames is one of the most highly subsidized industries in America.

The Escapist has reported on all kinds of federal, state and municipal governments offering tax breaks - in the form of deductions, write-offs and credits - for videogame companies from Square Enix to Curt Schilling's 38 Studios. Such incentives for game developers are highly sought after by lawmakers in these territories because they create jobs in the private sector, which in this economy is what unemployed constituents want from its leaders. An article in the New York Times this week took aim at these tax cuts by pointing out that behemoths like Electronic Arts made about $1.2 billion in profits over the last five years, but still benefits from several Federal tax breaks in the United States and overseas. No company makes its tax returns completely public, but EA reported that it paid $98 million in taxes over those years, far less than the official 35 percent corporate tax rate. The author of the article David Kocieniewski argues that these tax breaks need to be reevaluated.

From EA's point of view, suing for more tax breaks only makes good business sense. Not doing so would be like, "insisting on paying full price during a store sale," according to EA spokesman Jeff Brown.

Kocieniewski points out that many of the tax policies that benefit the videogame industry were actually written in the middle of last century to foster software development - back when computers were huge mainframes. And the industry as a whole hasn't been content with just breaks that are in place. EA has hired tax lawyer Glen A. Kohl to lobby Washington for more incentives as well as use foreign subsidiaries to avoid paying licensing and U.S. Federal corporate tax altogether.

The situation is further obfuscated by the dubious benefit to society that videogames provide, according to Kocieniewski. Tax breaks and subsidies exist to make industries that support the public good such as green technology and agriculture more profitable so that companies can invest in them. It offends Kocieniewski that Electronic Arts gets tax breaks to make those dang videogames that his kids are always playing.

"The company with the defiant sales slogan, 'Your Mom Hates Dead Space 2,' in effect gets financial help from moms and other United States taxpayers to reduce its federal tax bill," he wrote.

While I don't share Kocieniewski's views on games, I'm not sure that he's wrong about big videogame publishers avoiding taxes so easily. The current tax law rewards the company with the best accounting department and not the companies that make the best games. I'd much rather see tax policy benefit instead the small independent startups which would probably drive innovation forward much more than, say, Electronic Arts.

Source: The New York Times

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Do you know what else hurts the American economy?

Many members of the Fortune 500 illegally avoiding paying tax. Allegedly.

Or Fannie Mae collapsing.

Or massive overspending on Presidential Elections.

Or scrapping the Space Program.

Or Hurricane Irene.

Or keeping other countries "safe".

Did you know that Exxon Mobile made more money than Fannie Mae/Freddie Mac and the Bank of America lost this year?

But as usual, it's games that take the blame. Where not even Acti-Bliz brought in enough to get them into the Fortune 500, falling below the 4 thousand million needed to get into the bottom of the best.

Games. Oooh, they're bad.

Not to mention all the massive subsidies that food corps like ConAgra get for serving us substandard food.

The_root_of_all_evil:
Do you know what else hurts the American economy?

Many members of the Fortune 500 illegally avoiding paying tax. Allegedly.

Or Fannie Mae collapsing.

Or massive overspending on Presidential Elections.

Or scrapping the Space Program.

Or Hurricane Irene.

Or keeping other countries "safe".

Did you know that Exxon Mobile made more money than Fannie Mae/Freddie Mac and the Bank of America lost this year?

But as usual, it's games that take the blame. Where not even Acti-Bliz brought in enough to get them into the Fortune 500, falling below the 4 thousand million needed to get into the bottom of the best.

Games. Oooh, they're bad.

QFT,looks like again they don't have anyone to blame it on so they throw on video games,well you know what i'm happy that it hurts your(Tax) economy because your blaming other objects for stuff that you're responsible of.

The_root_of_all_evil:
Do you know what else hurts the American economy?

Many members of the Fortune 500 illegally avoiding paying tax. Allegedly.

Or Fannie Mae collapsing.

Or massive overspending on Presidential Elections.

Or scrapping the Space Program.

Or Hurricane Irene.

Or keeping other countries "safe".

Did you know that Exxon Mobile made more money than Fannie Mae/Freddie Mac and the Bank of America lost this year?

But as usual, it's games that take the blame. Where not even Acti-Bliz brought in enough to get them into the Fortune 500, falling below the 4 thousand million needed to get into the bottom of the best.

Games. Oooh, they're bad.

Because every article in the NYT has to cover every single way to "save" money so that gamers won't get offended, right?
Kocieniewski writes about one hole that could be filled, never does he imply that this alone would magically safe the entire economy, nor does he state that this is the biggest issue the US is dealing with. No need for the knee-jerk and I hope that you at least read the original article and not just the escapist rewrite.
I agree that the issue is overblown, but come on, don't pull the victim card at every drop of a hat.

I don't see video games as being the only problem here, but it is one issue among many with the way taxes are collected. With the country in the shape it's in now, where we are having all these problems with social security and so on, I don't think video game developers should be getting tax breaks like this. I do think that companies like EA should be paying the full 35% corperate tax.

Now granted, there are companies that are bigger problems than EA, but that doesn't mean that EA and it's ilk should be ignored simply because you can point fingers at other groups.

Tax breaks for things like video game companies are fine, when the country is not wallowing in massive debt. Sure, it is the goverment's fault we're in this position, but in the end the bills do need to be paid, and the money to pay them comes from American citizens and businesses.

Of course at the same time I'm quick to argue that the first thing the US should be doing is dropping it's foreign aid entirely. It's nice to be generous when we have the money to spread around, but for a long time we've been borrowing money in order to give it away. The first thing that needs to go are the gifts we're giving. Yes this means that safety, medicine, construction, education, etc... throughout the world that depends on US dollars is going to collapse. Those projects are fine, but we need to keep our own house in order first, after all if the US collapses entirely those things go with us.

I'll also admit ending foreign aid gives me a somewhat devilish sense of glee, the globe as a whole demonizes the US, insults us for getting involved, and gloats when our credit rating suffers. While the world will get by without us, I think everyone will find it a far less pleasant and comfortable place without us being as involved as we are now. Have a problem with the second and third world, and how the plight of the people there spills over into your back yard? Call France.

I'd say the most reasonable way to think about this issue would be comparing the good that these tax breaks do (keeping decent jobs in the US and keeping game developers and publishers in the US to pay taxes, even at a reduced rate) to the money lost in tax revenue.

The issue of larger game companies getting the breaks is irrelevant - the main point of policies such as these is to incentivize keeping large companies in the US so they pay our taxes and pay our citizens salaries so that they can pay taxes, not to encourage creativity or innovation. Indeed, prioritizing independent and unproven start-ups that employee fewer people and could easily fail on their first game seems to be foolhardy in comparison.

The United States one of the highest corporate tax rates in the world: the tax breaks for businesses are built in to counteract how high the rate is.

This leads to the bizarre situation that everyone complains about how corporations are dodging taxes when they're effectively being encouraged to dodge them. Hence why I'm happy to hear people FINALLY talking about reforming corporate tax code to get rid of the loopholes and lower the tax rate. It ought to make things a lot smoother overall.

Staskala:

Because every article in the NYT has to cover every single way to "save" money so that gamers won't get offended, right?

No, but if we're looking at people who get tax breaks, you could start with the top 500.

Or some of the tragedies.

Kocieniewski writes about one hole that could be filled, never does he imply that this alone would magically safe the entire economy, nor does he state that this is the biggest issue the US is dealing with.

He's just targetting an area that has been very recently freed of being decimated by the Californian Governor. You've got to admit the timing is suspicious.

No need for the knee-jerk and I hope that you at least read the original article and not just the escapist rewrite.I agree that the issue is overblown, but come on, don't pull the victim card at every drop of a hat.

"pull the victim card" "every drop" "knee-jerk" "at least" "rewrite"?

Sir, you imply much that is distasteful. But not as distasteful as condemning an industry that brings in seven billion dollars a year, but requires long periods of time to produce a finished product. Does the movie industry get tax breaks? Because I believe they get far more advertising, for far less, while bringing in far less money.

Yes, you can cure a hangover by amputation. It's not implied that this would magically cure it, or is it the biggest issue you'd have at that point, but it's not really a reliable or responsible cure to trot out to the masses, is it?

Hitman Dread:

I'm always amazed at the incredible gap of intelligence and maturity that exist in the Escapist News and their comment section.

Don't be so hard on them, I'm sure the Newsies do their best.

I'd remind that New York Times writer that the video game industry and gamers have been a big reason for the drive in better CPU, RAM, and GPU technology. Video games push the tech sector.
Besides, how many AAA titles are coming up in the next two months? That's a lot of business, and gamers will spend spend spend!

The_root_of_all_evil:
No, but if we're looking at people who get tax breaks, you could start with the top 500.

Or some of the tragedies.

I'm not really a fan of the NYT, but I'm fairly certain that the claim that it never criticizes the F500 and the many issues with corporate tax breaks holds much water. If anything this is more likely to be just another article in a long line of criticism, it just happened to be the video games industry this time.

He's just targetting an area that has been very recently freed of being decimated by the Californian Governor. You've got to admit the timing is suspicious.

Again, I'm not nearly invested enough to know how the NYT reported on this non-issue, so I'll give you the benefit of doubt that it did not very stellar in that regard. But was it Kocieniewski back then too? If yes, you might be on to something, granted.

"pull the victim card" "every drop" "knee-jerk" "at least" "rewrite"?

Sir, you imply much that is distasteful. But not as distasteful as condemning an industry that brings in seven billion dollars a year, but requires long periods of time to produce a finished product. Does the movie industry get tax breaks? Because I believe they get far more advertising, for far less, while bringing in far less money.

Yes, you can cure a hangover by amputation. It's not implied that this would magically cure it, or is it the biggest issue you'd have at that point, but it's not really a reliable or responsible cure to trot out to the masses, is it?

Now this is just a peeve of mine (thanks to certain sites I used to frequent), but I never implied anything - I outright stated so.
Anyway, yes, the article surely is to be criticized; he never mentions the benefits of a strong American entertainment industry, doesn't put things into perspective when compared to other industries, tries to quantify the social benefits of entertainment, etc..
That is criticism I can get behind - stating that this is just an attempt to discredit gamers and the video games industry is not.

I'd say that political bullshit and mass media fear mongering hurts america more.

Any business that can't survive without subsidies is not competitive and should be eaten up. This is why solar is such a waste, economically. If they weren't subsidized, the technology would have been further researched and it's possible for the price per kilowatt hour to come down below what fossil fuels provide. But as long as government subsidizes it with incentive programs like SRACs, then the technology will not progress because there is no incentive for research or perfection of the technology. They shouldn't be allowed to survive. But, tax breaks for companies in a country that has a corporate taxation rate of 35% is ok. Any company that produces jobs for an increasing amount of people due to success should not have to pay more taxes, but less. Less taxes is more prosperous for the people, while more taxes are simply more prosperous for governments at the cost of the people. That being said, lobbying as a special interest group in Washington shouldn't be allowed either (yay 17th Amendment!). There should be no intervention on behalf or against a successful industry, this includes taxes and subsidies. They certainly shouldn't get more tax breaks than other industries, but the problem is that the governments of the world are constantly picking and choosing favorites when this should not be allowed.

Tax breaks are not subsidies. A subsidy is an amount of money paid out to a company to aid in it's business dealings. That is like saying a company didn't have enough money stolen from it for the public good. Like, the US government actually pays money to oil companies to help them offset the costs of finding new oil wells (complete bullshit if you ask me, but what do I know).

Greg Tito:
Videogame Tax Credits Hurt the Economy

HYPOTHESIS:
If we give large companies tax breaks, they will use those savings to innovate and create new jobs.

PROCEDURES:
1. Establish tax breaks for these large companies.
2. Hope.
3. Whoops.

RESULTS:
As it turns out, if no one makes them spend this money on creating new jobs, they tend to just keep it for their own damned selves. Also, they'll employ other ways of dodging taxes and move more jobs overseas to cut costs even more. In the end, the only people that end up with more money are the folks running the corporation. Oh, and those jobs this plan "created?" Yeah, they all get laid off when the project is done.

d43dr34m3r:
I'd say the most reasonable way to think about this issue would be comparing the good that these tax breaks do (keeping decent jobs in the US and keeping game developers and publishers in the US to pay taxes, even at a reduced rate) to the money lost in tax revenue.

The issue of larger game companies getting the breaks is irrelevant - the main point of policies such as these is to incentivize keeping large companies in the US so they pay our taxes and pay our citizens salaries so that they can pay taxes, not to encourage creativity or innovation. Indeed, prioritizing independent and unproven start-ups that employee fewer people and could easily fail on their first game seems to be foolhardy in comparison.

I agree here. When it comes to tax policy we are not talking about the next new thing or the new but untested avenues of income. We are talking cold hard cash and security of that cash. By those meters it is better to bet on large companies. I am all for innovation and new ideas being explored, but we must recognize that these things are risky and the government cannot afford to take risks at this point.

What is wrong with this? I'm usually against Tax breaks, but take a real look at the economy.

Top U.S. Exports
1) Defense.
2) Hollywood
3) Technology and Software
4) Biotech

Hollywood is actually eventually going to fade, giving way to the new entertainment entrepreneurs - Microsoft, Apple, Sony, Nintendo and the like. You know how much American industry is involved there? Microsoft, Valve, EA, Activision, and Bethesda. And they're in tight competition with a growing European market (which give heavy tax incentives themselves) - Rockstar, Crytek, etc. In Asia, the Japanese are trying to regain their prominence, while Indian and Chinese devs are coming into the market.

We need to hire and develop local US talent, and foster the industry - we need to remain competitive. If anything it's helping the economy for a corporation to receive tax breaks in order to hire software developers, programmers, and artists, and designers, and everything going into a game. These people need jobs.

Now, perhaps some tighter scrutiny should be paid to make sure the money actually goes into the US economy, but for the most part this is a good thing.

Dastardly:

Greg Tito:
Videogame Tax Credits Hurt the Economy

HYPOTHESIS:
If we give large companies tax breaks, they will use those savings to innovate and create new jobs.

PROCEDURES:
1. Establish tax breaks for these large companies.
2. Hope.
3. Whoops.

RESULTS:
As it turns out, if no one makes them spend this money on creating new jobs, they tend to just keep it for their own damned selves. Also, they'll employ other ways of dodging taxes and move more jobs overseas to cut costs even more. In the end, the only people that end up with more money are the folks running the corporation. Oh, and those jobs this plan "created?" Yeah, they all get laid off when the project is done.

Only, EA (and other successful companies) routinely reinvest that money back into the company. They are not "keeping it for themselves" as you say. They have used lots and lots of the that phat videogame cash to purchase studios, strengthening their position in the industry. They have overall, as a single stand alone company, come to employ an ever increasing number of people, which is better for the industry and better for the the US, economically speaking. And if jobs transfer overseas, it's because the US isn't competitive in a world market. That is also the governments fault, not EA's. The only way a company such as EA produces anything affordable for the US consumer is by keeping costs down by going to countries where labor is cheaper.

I hate EA, I don't like how they think they can get away with bullying their customers, so I don't buy their games, but defending their position is the right thing to do, even if they are a bunch of douche bags.

Staskala:

I'm not really a fan of the NYT, but I'm fairly certain that the claim that it never criticizes the F500 and the many issues with corporate tax breaks holds much water.

Which is why I didn't claim it. You yourself point out the difference between implication and stating, later. Give me the benefit of said doubt.

Having an article about If anything this is more likely to be just another article in a long line of criticism, it just happened to be the video games industry this time.

And next time, what? "The Films of Tarantino"?

When you've already exhausted, or looked through 500 companies - including Phillip Morris, McDonalds, Dick's Sporting Goods - then it's a pretty desperate report to bring up Electronic Arts - and then apply it to the whole gaming industry - when only the Triple A titles will be doing that.

Remember that that report would indite Zynga in the same area as Media Molecule.

Now this is just a peeve of mine (thanks to certain sites I used to frequent), but I never implied anything - I outright stated so.

But due to the forum guidelines, I can't directly accuse you of something, or I'm in breach. Equally, due to text being two-dimensional, I can't tell your emotional state when you wrote that. That's why the "dance of implication" exists.

Anyway, yes, the article surely is to be criticized; he never mentions the benefits of a strong American entertainment industry, doesn't put things into perspective when compared to other industries, tries to quantify the social benefits of entertainment, etc..
That is criticism I can get behind - stating that this is just an attempt to discredit gamers and the video games industry is not.

Implication and Statements again. I'm saying that blaming the gaming industry for EA, while stepping past far more obvious implications gives a very tarnished outlook on Mr. Kocieniewski's stance - and reason for reporting it.

Taking a quick look at Mr. Kocieniewski's stance - it does seem like he's on a blame mission at the moment: http://topics.nytimes.com/topics/reference/timestopics/people/k/david_kocieniewski/index.html

But General Electric? http://www.nytimes.com/2011/03/25/business/economy/25tax.html?ref=davidkocieniewski

They pay no tax whatsoever.

So, EA aren't really that bad, are they? Or at least, not in this respect.

Baresark:
Only, EA (and other successful companies) routinely reinvest that money back into the company. They are not "keeping it for themselves" as you say. They have used lots and lots of the that phat videogame cash to purchase studios, strengthening their position in the industry. They have overall, as a single stand alone company, come to employ an ever increasing number of people, which is better for the industry and better for the the US, economically speaking. And if jobs transfer overseas, it's because the US isn't competitive in a world market. That is also the governments fault, not EA's. The only way a company such as EA produces anything affordable for the US consumer is by keeping costs down by going to countries where labor is cheaper.

I hate EA, I don't like how they think they can get away with bullying their customers, so I don't buy their games, but defending their position is the right thing to do, even if they are a bunch of douche bags.

How would you make the US "competitive" in the world market?

No matter how "competitive" our workers may be, they can't survive on $1 a day. But some overseas folks can. So there are some jobs lost to us. (Obviously, I'm not confining this assessment to video game companies.) These aren't the kind of jobs we need right now in the US, considering a lot of our unemployed don't have the training they'd need to hold one of these jobs.

Amazingly, though, when a US company shuts down a plant to move it to El Salvador and save a mint on labor, we don't see the slightest change in price here. So that means folks here buying those products are no better equipped to live on $1 a day. They still have to pay top dollar, so they need to make more.

How would the government fix this? Well... the only real method is to stop feeding money and loopholes to these big companies. Give the money to the rich, and they'll hold onto as much of it as they can and spend just what they need to turn more profit. And they'll spend it in other countries because the Third World works cheap. Give the money to the middle class, and they'll spend it here, in our own businesses. "Trickle down" has always been a load of bullshit, but "trickle up" will work without fail if you want to get the economy moving.

More to the topic, EA employs a lot of people, but (as you mentioned) a lot of that is the result of buying up studios that already existed. In the majority of these purchases, do you think that studio gained or lost employees? If they lose even one employee during the transfer, the result is that fewer people are employed on the whole, even if EA's roster got bigger.

Greg Tito:
No company makes its tax returns completely public, but EA reported that it paid $98 million in taxes over those years, far less than the official 35 percent corporate tax rate. The author of the article David Kocieniewski argues that these tax breaks need to be reevaluated.

Say what you will about the evils of corporatism: the part in bold is what is hurting the economy. The tax breaks should be eliminated, but the corporate tax rate needs to be SLASHED to at LEAST 20%. If you disagree on the principle of FUCK CORPORATIONS, thats fine, but America has the highest corporate tax rate in the world, and our multinational corporations are all now paying their taxes in much tax-friendlier european nations. The corporations aren't going to pay 35%. Period. But I'd rather them pay us 20% than zero.

Slash to 20%, cut the breaks by 75%, and bring our corporations home.

Dastardly:

Baresark:
snip

How would you make the US "competitive" in the world market?

No matter how "competitive" our workers may be, they can't survive on $1 a day. But some overseas folks can. So there are some jobs lost to us. (Obviously, I'm not confining this assessment to video game companies.) These aren't the kind of jobs we need right now in the US, considering a lot of our unemployed don't have the training they'd need to hold one of these jobs.

Amazingly, though, when a US company shuts down a plant to move it to El Salvador and save a mint on labor, we don't see the slightest change in price here. So that means folks here buying those products are no better equipped to live on $1 a day. They still have to pay top dollar, so they need to make more.

How would the government fix this? Well... the only real method is to stop feeding money and loopholes to these big companies. Give the money to the rich, and they'll hold onto as much of it as they can and spend just what they need to turn more profit. And they'll spend it in other countries because the Third World works cheap. Give the money to the middle class, and they'll spend it here, in our own businesses. "Trickle down" has always been a load of bullshit, but "trickle up" will work without fail if you want to get the economy moving.

More to the topic, EA employs a lot of people, but (as you mentioned) a lot of that is the result of buying up studios that already existed. In the majority of these purchases, do you think that studio gained or lost employees? If they lose even one employee during the transfer, the result is that fewer people are employed on the whole, even if EA's roster got bigger.

It's not as simple as a single thing. There is a plethora of problems that lead up to this. The two biggest (in my opinion, of course) is inflation and wage laws. Basically, if the money was allowed to deflate, then the price of goods would drop and you could make less money and still keep your lifestyle. Wages laws such as minimum wage (which is very discriminatory in nature) would also need to be done away with. You can't define for people what their work is worth, only they and who they choose to work for can decide that. Of course, along with wage laws, a problem is union labor and collective bargaining. The problem with it is that no one is allowed to negotiate their own contracts. If you choose to be in a unionized industry and don't want to be a union man, you still MUST pay union dues, and you still MUST take their negotiated contract. You have all the negatives, and if you get into trouble, they throw you under the bus.

As an aside, the reason why deflation is never allowed is because the government is trying to protect peoples investments, but if they were more savvy investors, they wouldn't buy something for more than it's potentially worth in the future. It's the reason for the bailouts and subsidization of the housing industry and bad banks who suffered from the housing bubble collapse. In a market, there is always ups and downs. Constant inflation tries to combat this, but then you just end up with more financial crisis like what happened with the housing bubble. This is also the reason you never see the price of a good drop, even if it's made cheaper today than it was yesterday.

Just giving money to the middle class wouldn't fix anything. You would need a way for people to earn the money. An economic rule is: if you pay people to not be productive and not work, then people will be not productive and not work. That is why handout programs don't work. And it's important for global capitalism to be understood. Protecting US industry is a bad idea because people everywhere are primarily consumers. If you were to block off cheap imports, you would be left with more expensive and less efficiently made domestic goods. Also, without the foreign competition, there would be no incentive for research into better avenues of development. Also, because of the economic downfalls of the deflation/inflation debate, savings is shot. There is no incentive to save, only to spend. That also hurts the middle class.

I would love to have some kind of counter to your final statement, but I don't. Unfortunately, we have no way of tracking any of it beyond speculation as those kinds of records are confidential. I'm not saying that there is no way they never fired anyone, but you can't always have less people and still be productive enough for your profits to soar as high as theirs have.

thiosk:

Greg Tito:
No company makes its tax returns completely public, but EA reported that it paid $98 million in taxes over those years, far less than the official 35 percent corporate tax rate. The author of the article David Kocieniewski argues that these tax breaks need to be reevaluated.

Say what you will about the evils of corporatism: the part in bold is what is hurting the economy. The tax breaks should be eliminated, but the corporate tax rate needs to be SLASHED to at LEAST 20%. If you disagree on the principle of FUCK CORPORATIONS, thats fine, but America has the highest corporate tax rate in the world, and our multinational corporations are all now paying their taxes in much tax-friendlier european nations. The corporations aren't going to pay 35%. Period. But I'd rather them pay us 20% than zero.

Slash to 20%, cut the breaks by 75%, and bring our corporations home.

I could not agree with this more. A corporation will pay high wages the US economy DEMANDS, if they corporate tax rates were not the highest in the world. It's like burning the candle at both ends.

I had gotten into this very debate with an older gentleman, who thought a good idea was making it illegal for companies to outsource like they do. I made the same point, that cutting the tax rate and getting less taxes from them pales into insignificance of not getting any tax revenues at all from them.

The_root_of_all_evil:
When you've already exhausted, or looked through 500 companies - including Phillip Morris, McDonalds, Dick's Sporting Goods - then it's a pretty desperate report to bring up Electronic Arts - and then apply it to the whole gaming industry - when only the Triple A titles will be doing that.

Remember that that report would indite Zynga in the same area as Media Molecule.

Looks like we disagree here, I consider no issue small enough to not warrant criticism.
Indeed, companies like EA or Zynga getting more subsidiaries than they need is utterly insignificant on the grand scale of things, but I see nothing wrong with calling out lobbyism and tax "evasion". You imply that Kocieniewski also includes indie devs here, but I question that, as he never mentions them. Rather, he seems to have an issue with the fat cat(s), no one else.

But due to the forum guidelines, I can't directly accuse you of something, or I'm in breach. Equally, due to text being two-dimensional, I can't tell your emotional state when you wrote that. That's why the "dance of implication" exists.

Another needless anglo-saxon practice. Why are you people so averted to directness?
Whether you say so directly or cowardly hide behind the facade of indirectness doesn't change the fact that those words still came from your mouth keyboard.

Implication and Statements again. I'm saying that blaming the gaming industry for EA, while stepping past far more obvious implications gives a very tarnished outlook on Mr. Kocieniewski's stance - and reason for reporting it.

Taking a quick look at Mr. Kocieniewski's stance - it does seem like he's on a blame mission at the moment: http://topics.nytimes.com/topics/reference/timestopics/people/k/david_kocieniewski/index.html

But General Electric? http://www.nytimes.com/2011/03/25/business/economy/25tax.html?ref=davidkocieniewski

They pay no tax whatsoever.

So, EA aren't really that bad, are they? Or at least, not in this respect.

Well, you can always use the "not as bad as ..." argument until you inevitably reach the arms industry, so I'm really not a big fan of it.
But yeah, EA obviously isn't as bad as half of the F500, I'd never dispute that.
Again, I'm really not a big fan of the article myself, but I think implying ill intentions or even a higher agenda is going a bit too far.
Like I said above, there is no proof to imply any of that. The article leaves much to be desired, but I see no reason to cry foul here.

I would just love to see EA get screwed by that stupid Dead Space 2 ad campaign.

"The company with the defiant sales slogan, 'Your Mom Hates Dead Space 2,' in effect gets financial help from moms and other United States taxpayers to reduce its federal tax bill," he wrote.

You just knew that stupid ad campaign was going to bite them in the ass. It was just a matter of time...

The U.S. has the highest corporate income tax rate in the world...

Oh, for pity's sake. This is the kind of hyperbole that keeps getting passed around until everyone is certain it's gospel, and no one can even be bothered to check and see if it's true because it reflects what they already want to believe.

The U.S does not have the highest corporate tax rate in the world. Japan does, and several others have official rates that are at a par with those of the U.S., including countries like Brazil whose economies are on the rise.

Meanwhile, a General Accounting Office study cited by Business Week notes that between 1998 and 2005, 55% of large businesses had at least one year in which they paid no taxes at all.

I agree that we'd be better off with a lower corporate tax rate that was actually paid right across the board than a higher one. But I'm really, really tired of this idea that lower taxes are the magic bullet to make all our ills better. I'm sick of people ignoring history with this idea that if we don't make them pay taxes, and rip apart health, safety, and environmental regulations, and raze unions, and let them take over their own worker's compensation systems, that maybe the jocks will like us and stop beating us up for our lunch money.

Don't give them tax breaks, they'll just move here (Canada). I've got no problem with that.

My take? FUCK YOU, EA!

And FUCK YOU, David Kocieniewski!

oh, and @Staskala,

The fact that Kocieniewski never mentions indie developers is irresponsible journalism. As is the headline photo that clearly draws the industry only as a lucrative producer of entertainment products on the scale of Hollywood, and his constant references to Dead Space. As a holder of a journalism master's degree, I can tell you with certainty that this is not legitimate journalism - which would require doing one's best to tell a balanced story - and as such, should pretty much be excluded from any serious critique.

Take it from me, the NYT is more and more becoming a pro-war, pro-business right wing mouthpiece since some extreme changes in editorial philosophy in the last decade or so.

Staskala:

Again, I'm really not a big fan of the article myself, but I think implying ill intentions or even a higher agenda is going a bit too far.

David Kocieniewski refers to the gaming industry as doing this. Which directly implicates all gaming as one industry. That's irresponsible/tabloid journalism.

The implication is not a higher agenda, but a lower agenda. He's found one area that could be improved, so - without any background research - he's inflated it to equal with one of the biggest power companies in America paying no tax. (Remember, he even states EA paid nearly $100 million).

That's wrong.

Oh and

Another needless anglo-saxon practice. Why are you people so averted to directness?

That, by definition, is racism.

Dastardly:

Greg Tito:
Videogame Tax Credits Hurt the Economy

HYPOTHESIS:
If we give large companies tax breaks, they will use those savings to innovate and create new jobs.

PROCEDURES:
1. Establish tax breaks for these large companies.
2. Hope.
3. Whoops.

RESULTS:
As it turns out, if no one makes them spend this money on creating new jobs, they tend to just keep it for their own damned selves. Also, they'll employ other ways of dodging taxes and move more jobs overseas to cut costs even more. In the end, the only people that end up with more money are the folks running the corporation. Oh, and those jobs this plan "created?" Yeah, they all get laid off when the project is done.

In the US nobody is making them spend that money on jobs, in the uk any tax breaks or government sponsership comes with a big nice clause that says

IF YOU INCREASE YOUR STAFF BY x %

Its pretty useful :)

As much as I like games, I don't think the industry should be "subsidized". I mean, gaming is a pretty 'big thing', maybe you've all heard about it.

I don't think anything should be subsidized really. It creates huge anomalies in the market, and for the public in general. Corn, for instance, is subsidized in America, and as a result you see it as an ingredient in every single fricking thing in the grocery store. Even when it doesn't need it, someone will find a way.. because its subsidized, and more is always good. High-fructose corn syrup anyone? No thanks.

The_root_of_all_evil:
Oh and

Another needless anglo-saxon practice. Why are you people so averted to directness?

That, by definition, is racism.

Wait, what? Racism? Are you serious?
Now, I do know that a joking tone doesn't carry over very well to the internet, but even if you took that 100% seriously, how does calling it racism make any sense? Even remotely? If anything, it's a cultural thing that very much exists.
Besides, I didn't know there was any racial distinction between Germans and Britons, as both the Angles and the Saxons came from Germany.
I'd really like to know by which definition exactly this can be called racism; although I still hope you were just joking there.

So the tax laws need to be fixed because they're old and inefficient. Next thing you're going to tell is that the sky is blue and birds go tweet.

Tax law is a confusing mess that nobody understand completely. It needs to be fixed but fixing it is such a huge proposition that its not like you can just snap your fingers or wave the IRS wand and make it work. Sometimes its just broken. It'd be nice to see them fix loopholes like this though.

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