Washington Tax Plan Would Punish Violent Game Makers

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Washington Tax Plan Would Punish Violent Game Makers

The House Committee on Ways and Means has released a tax reform plan that includes provisions to strip violent game makers of a valuable tax credit.

Someday I think we're going to look back on the years where the government picked on games and laugh. "Silly democratically elected representatives," we'll say, rolling out eyes at the inanity of government bodies treating a successful industry like the bogeyman in the midst of a snails paced economic recovery.

Sadly, since we haven't yet reached that beautiful future just yet, we're stuck dealing with the present. A present that includes a recently unveiled tax reform bill that, if passed, would punish American companies that make violent video games. According to page 24 of the bill, companies involved in the creation of violent games would no longer be able to claim a valuable research and development tax credit. Ironically, the bill itself describes this credit as a benefit that gives "American manufacturers the certainty they need to compete against their foreign competition who have long had permanent R&D incentives." Apparently American game developers don't merit such competitive advantages.

Now it's important to remember that this bill, a product of the GOP controlled House Committee on Ways and Means, isn't yet official law. It still needs to run the ringer of being passed and could wind up changing during that process. That being said, even if it were signed into law I have a feeling it wouldn't go unchallenged. For one, the definition of "violent" as its presented is very vague. More than that though, video games are protected speech under the first amendment and you could make a solid argument that this bill is essentially punishing companies for exercising their free speech. We will, of course, be watching this to see how it pans out.

Source: Washington Examiner

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Ahh silly gop, where 'free-speech' means getting rid of all speech they don't agree with.

I see only two possible outcomes from this...

CHOICE 1: This passes, but then the Supreme Court declares it unconstitutional anyway...and the GOP dig themselves into a deeper hole for it.
CHOICE 2: This fails in the most epic way possible...and the GOP dig themselves into a deeper hole for it.

Either way... *sees what the Captcha is* Huh...the Captcha has it!

CAPTCHA: had a great fall

Nicely said, Captcha!

This is only slightly less idiotic than the bill that the Governor of Arizona vetoed that said Gay people could be denied service at places of business due to "religious grounds". It's unconstitutional and will be shot down if it does become law.

AH yes, and while they're at it, ban all movies that rate higher than PG...because, you know, THAT'S a great idea....

Idiots...

mmmh, how about higher taxing on stuff that's actually meant to kill people - like guns.

Why do they keep on wasting taxpayer time on this? If they made this into a law and Hollywood and TV got tax credit the same way, they would also legally have to lose that tax credit. Which definitely won't fly with a super greedy industry well seated in the government like the movies. Along with the freedom of speech violation, there's too many things that will beat this stupid bill to death if it's made into law. Instead of spending time researching and learning about the modern world, they just want to fight it for no good reason besides there being idiot voters who are like them.

Rhetorical question: Why haven't these old fools that waste time on non-issues and bills that obviously violate existing higher laws been voted out yet?

I can't see this becoming law, but even if it does what it might do is chase development teams out of the US and into other countries.

Hairless Mammoth:
Rhetorical question: Why haven't these old fools that waste time on non-issues and bills that obviously violate existing higher laws been voted out yet?

Because they have the money to campaign, really. It's very hard for a new candidate to actually get enough attention in a district, let alone the whole state for a senate seat, to make people believe he would actually be *BETTER* than the existing one, and thus worth voting for instead of just not, or maintaining the status quo.

Uratoh. Answering questions nobody wanted answers to since 1981.

Worgen:
Ahh silly gop, where 'free-speech' means getting rid of all speech they don't agree with.

Ahh silly DNC, where "free-speech" means getting rid of all speech they don't agree with.

Just because the GOP is coming up with this bill doesn't mean that both sides aren't still a bunch of self-serving ass-wipes. And hey, since this is likely to increase taxes if it goes through, then the DNC will likely be all for it.

I can't wait for the day where everyone in Congress actually grew up with video games and Internet as something in their lives.

That way, they could actually work to try to improve things such as our networking infrastructure (which is a joke right now), instead of trying to pass bills like this and SOPA, which are nothing more than technological witch hunts.

BloodRed Pixel:
mmmh, how about higher taxing on stuff that's actually meant to kill people - like guns.

there already is... the government actually already taxes guns greatly. actually the government has an agenda to keep guns away from it's citizens as much as possible, if she hits the fan we would be less likely to fight back.

Worgen:
Ahh silly gop, where 'free-speech' means getting rid of all speech they don't agree with.

See, not really. It's taking away money from them that the government carved out for them in the first place.

I don't think this tax credit should exist at all, at least not for video games. Medical technology, sure, that's very important. But video games are being essentially subsidized by the federal government? What the fuck?

RJ 17:

Worgen:
Ahh silly gop, where 'free-speech' means getting rid of all speech they don't agree with.

Ahh silly DNC, where "free-speech" means getting rid of all speech they don't agree with.

Just because the GOP is coming up with this bill doesn't mean that both sides aren't still a bunch of self-serving ass-wipes. And hey, since this is likely to increase taxes if it goes through, then the DNC will likely be all for it.

Especially considering the Senate Majority Leader (a Democrat) just declared his critics un-American on the floor of the Senate. Seriously. He's gone Full McCarthy. Again.

A couple years ago I would have been worried that this would pass because games were largely dismissed by the public at large. BUt considering that games are the most valuable entertainment properties now, and all the top selling games would be defined as violent, I suspect there is just too much money involved for this to pass without a massive fight.

The American government believe they have too much power.

Reading between the lines, why is the government ladling out taxpayer money to video game makers in the first place? What pubic benefit is meant to be gained that offsets the cost of this measure? Are the game makers expected to share the results of this "R&D" for everyone to benefit?

Violent game makers aren't being punished, they are just aren't being rewarded.

The GOP supports the right to own guns, but they attempt to pass this kind of law. It is starting to make sense why nothing gets done in this country.

Veylon:
Reading between the lines, why is the government ladling out taxpayer money to video game makers in the first place? What pubic benefit is meant to be gained that offsets the cost of this measure? Are the game makers expected to share the results of this "R&D" for everyone to benefit?

Violent game makers aren't being punished, they are just aren't being rewarded.

You would be surprised how much R&D the video game industry does. I don't expect you to believe me, but a lot of the advanced programs we have today (solving algorithms, artificial intelligence, and the like) were created by game programmers. Some experts also strongly believe that the cure for aids will be found by an artificial intelligence programmer. Military unmanned drones wouldn't be what they are now if it weren't for the games industry.

Worgen:
Ahh silly gop, where 'free-speech' means getting rid of all speech they don't agree with.

Yup, big government conservatives trying to legislate morality again. Although, to be fair, that can happen with "Think of the children!"-lefties as well.
In a couple of years, decades at worst, one would expect that issue to be dead and gone, though, considering by then many of the young people of today - who tend to be more active gamers than older folks for now - will be in politics.
Of course, I fully expect some other medium, fad, music- or fashion-type or whatever to be the next big boogeyman by then. I. e., while gamers will obviously make more gaming-tolerant politicians in time, I don't think they'll necessarily be more enlightened when it comes to new media of that future day.

Keiichi Morisato:

there already is... the government actually already taxes guns greatly. actually the government has an agenda to keep guns away from it's citizens as much as possible, if she hits the fan we would be less likely to fight back.

Maybe on paper, but not in practice.

I can go down to my local AR-15 store (seriously, there's a store in my town that deals exclusively in AR-15s) and get set up with a semi-auto rifle and a couple hundred rounds of ammunition for cheaper (< $1,000) than it would cost for me to get set up with a top-of-the-line gaming rig (Maingear Shift Super Stock, $4,000 refurbished) and the top-selling FPS.

Veylon:
Reading between the lines, why is the government ladling out taxpayer money to video game makers in the first place? What pubic benefit is meant to be gained that offsets the cost of this measure? Are the game makers expected to share the results of this "R&D" for everyone to benefit?

Because under GAAP, R&D costs can't be capitalized until a marketable product is created. So all those costs are carried as flat expense. A tax break on those expenses offsets the hit to the bottom line and, in theory, encourages companies to maintain development where otherwise they'd be more wary.

Apparently, we have learned nothing from the days of the Hayes Comics Code, or the . . . I forget what the rules governing Hollywood were. All you do is hurt the creative talent of those who make stuff and, when the laws are eventually revoked (as they always are), you get people who pull a 180 and go to the opposite extreme.

Veylon:
Violent game makers aren't being punished, they are just aren't being rewarded.

In Pavlovian psychology, this is called "Negative punishment" where you punish someone by taking away something good.

Veylon:
Reading between the lines, why is the government ladling out taxpayer money to video game makers in the first place? What pubic benefit is meant to be gained that offsets the cost of this measure? Are the game makers expected to share the results of this "R&D" for everyone to benefit?

Violent game makers aren't being punished, they are just aren't being rewarded.

Precisely. But, as a common thorn in the side of various people on this forum, I can tell you people are very emotional about things like this, facts be damned.

MinionJoe:

Keiichi Morisato:

there already is... the government actually already taxes guns greatly. actually the government has an agenda to keep guns away from it's citizens as much as possible, if she hits the fan we would be less likely to fight back.

Maybe on paper, but not in practice.

I can go down to my local AR-15 store (seriously, there's a store in my town that deals exclusively in AR-15s) and get set up with a semi-auto rifle and a couple hundred rounds of ammunition for cheaper (< $1,000) than it would cost for me to get set up with a top-of-the-line gaming rig (Maingear Shift Super Stock, $4,000 refurbished) and the top-selling FPS.

Veylon:
Reading between the lines, why is the government ladling out taxpayer money to video game makers in the first place? What pubic benefit is meant to be gained that offsets the cost of this measure? Are the game makers expected to share the results of this "R&D" for everyone to benefit?

Because under GAAP, R&D costs can't be capitalized until a marketable product is created. So all those costs are carried as flat expense. A tax break on those expenses offsets the hit to the bottom line and, in theory, encourages companies to maintain development where otherwise they'd be more wary.

Nice apples-to-oranges fallacy right there.

Guns have many taxes and fees associated with them. And many, many laws concerning them.

Aren't liberals usually against tax credits? This just a red line because it's a product you like? Isn't that called hypocrisy?

Sigh...and people wonder why so many companies outsource jobs outside of the U.S.

Sniper Team 4:
Sigh...and people wonder why so many companies outsource jobs outside of the U.S.

That's because labor in America is much more expensive and much more litigious. And then there's all the regulation and taxes and other bullshit. In short, liberals suck. Obama sucks. The economy sucks because their policies suck. Yadda yadda yadda.

And we don't know who wrote that passage. Could have easily been an amendment by a Democrat on the committee. Because that's a civics lesson for ya.

Or do all the liberal members of The Escapist Forums forget who was the face of the "anti-violent video games" campaign in the Senate a decade ago? The frontrunner for the nomination in 2016! Hillary Clinton. (Which is why her face is in place of the Statue of Liberty in GTA IV.)

Veylon:

Violent game makers aren't being punished, they are just aren't being rewarded.

For this though, why just go after games that are deemed violent? Why not equally tax all video game companies instead of the ones that make "violent" games? The fact that this singles out one type of game and not others is where I have issues with it, because it just creates more possible loop-holes in our already completely backwards tax system. Not to mention that the ESRB ratings are based on standards the ESRB makes, and those standards hold no legal grounds at all, unlike the PEGI system which works well, and "violent" games can be made rated T for Teen as well, so it might not just go after rated M games, but what is deemed "violent".

Neronium:

Veylon:

Violent game makers aren't being punished, they are just aren't being rewarded.

For this though, why just go after games that are deemed violent? Why not equally tax all video game companies instead of the ones that make "violent" games? The fact that this singles out one type of game and not others is where I have issues with it, because it just creates more possible loop-holes in our already completely backwards tax system. Not to mention that the ESRB ratings are based on standards the ESRB makes, and those standards hold no legal grounds at all, unlike the PEGI system which works well, and "violent" games can be made rated T for Teen as well, so it might not just go after rated M games, but what is deemed "violent".

Then just get rid for it for all video games then? Huh? I'd be all in favor of that. The tax code should be a single page, not the monstrosity it is. But then accountants wouldn't make so much money, now would they? (The trade group for accountants recently voiced its opposition to the tax reform bill.)

Veylon:
Reading between the lines, why is the government ladling out taxpayer money to video game makers in the first place? What pubic benefit is meant to be gained that offsets the cost of this measure? Are the game makers expected to share the results of this "R&D" for everyone to benefit?

Violent game makers aren't being punished, they are just aren't being rewarded.

I could see your argument if it were video games in general which were not eligible for R&D tax credits. However the bill specifies violent games specifically, which is just stupid.

Big_Willie_Styles:

Then just get rid for it for all video games then? Huh? I'd be all in favor of that. The tax code should be a single page, not the monstrosity it is. But then accountants wouldn't make so much money, now would they? (The trade group for accountants recently voiced its opposition to the tax reform bill.)

Personally I've always believed in a flat-tax system as they are simple and they close a lot of the loopholes that many companies use. Problem is that will never come to be in the US because both major parties, Republican and Democrat, are basically in the pockets of companies and as a result they would lobby against such a thing. There are downsides to a flat-tax system yes, but compared to the current system we have know anything would be better.

The problem is the broken tax system. They legislate with taxes rather than laws. The government exercises most of its control by withholding funding to state governments, or withholding taxbreaks to companies. It keeps them from having to challenge the constitution.

Most political coverage I've seen places the highly optimistic window for any tax reform sometime around 2016. The more cynical would place it after 2019. Several analysts that I have read from say it's unlikely that any major bills will be passed at all in the mid term election year (this year).
The little analysis I've seen of the bill says it will cut 'entitlements' (so no democrats voting for it), and republicans really want to have a chance in the elections and aren't willing to touch anything that might be difficult.
The short version: This plan doesn't have a chance in hell.

Neronium:
Personally I've always believed in a flat-tax system as they are simple and they close a lot of the loopholes that many companies use. Problem is that will never come to be in the US because both major parties, Republican and Democrat, are basically in the pockets of companies and as a result they would lobby against such a thing. There are downsides to a flat-tax system yes, but compared to the current system we have know anything would be better.

No, a majority of Republicans have been pushing tax reform for decades. It's the Democrats who've been recalcitrant. They like the tax code being complex and impossible for anybody to understand. It allows carve outs for their preferred industries whilst they get to rail against the carve outs for industries they don't favor. Never underestimate the power of demagoging when it comes to liberals. They're only good at one thing: Winning elections.

GamemasterAnthony:
I see only two possible outcomes from this...

CHOICE 1: This passes, but then the Supreme Court declares it unconstitutional anyway...and the GOP dig themselves into a deeper hole for it.
CHOICE 2: This fails in the most epic way possible...and the GOP dig themselves into a deeper hole for it.

Either way... *sees what the Captcha is* Huh...the Captcha has it!

CAPTCHA: had a great fall

Nicely said, Captcha!

Is this proposed amendment unconstitutional though? I'm no constitutional lawyer, I'm not even American, but I'm pretty the U.S. Constitution just prohibits the government from making laws that prohibit free speech. This on the other hand doesn't prohibit anyone from making any sort of game they want, it rather restricts tax credits to certain games. I don't see how lack of government support could reasonably be taken as actually infringing on a person's freedom of speech.

Big_Willie_Styles:

No, a majority of Republicans have been pushing tax reform for decades. It's the Democrats who've been recalcitrant. They like the tax code being complex and impossible for anybody to understand. It allows carve outs for their preferred industries whilst they get to rail against the carve outs for industries they don't favor. Never underestimate the power of demagoging when it comes to liberals. They're only good at one thing: Winning elections.

And blaming just "liberals" isn't going to fix anything. Both parties are to blame for the current way things are done, and blaming just one side never gets anything done. Just like blaming only Republicans for being "too conservative", blaming Democrats for being "liberal" doesn't solve anything at all. So yes, there are some Republicans just like there are some Democrats pushing for reform, but both parties mainly won't do it because they will lose money in some way.

That's funny. It reads "Washington Tax Plan Would Punish Violent Game Makers", but is reads as "Conservative Party Makes Another Kneejerk Reaction At Things It Doesn't Understand Or Like", and then it interprets as "Stupid Politicians Wave Arms Ineffectually At Issue They Can't Actually Do Anything About". *Sigh*

Neronium:
Personally I've always believed in a flat-tax system as they are simple and they close a lot of the loopholes that many companies use. Problem is that will never come to be in the US because both major parties, Republican and Democrat, are basically in the pockets of companies and as a result they would lobby against such a thing. There are downsides to a flat-tax system yes, but compared to the current system we have know anything would be better.

Big_Willie_Styles:

No, a majority of Republicans have been pushing tax reform for decades. It's the Democrats who've been recalcitrant. They like the tax code being complex and impossible for anybody to understand. It allows carve outs for their preferred industries whilst they get to rail against the carve outs for industries they don't favor. Never underestimate the power of demagoging when it comes to liberals. They're only good at one thing: Winning elections.

The pair of you need to understand that "loopholes" are not an inherent property of a progressive tax system. The extremely corporatist GOP wants a flat tax because such a system heavily favors big business and the very wealthy (and the rhetoric appeals to their simple-minded base). The slightly less extremely corporatist Democratic party favors keeping the current tax system because it to some degree obscures how heavily it favors big business and the very wealthy.

Our tax system is in principle (not execution) very good. The progressive rates mean the government can have adequate income for its needs without depriving those who cannot afford it and tax credits allow automatic adjustments based on the cost of living/doing business and provide the government a good means of incentivising beneficial behavior without unjust coercion.

A loophole is just a bad tax credit (or trade law, but that's not income tax related). Does anyone really consider claiming a dependent on your tax returns a loophole?

JoJo:

Is this proposed amendment unconstitutional though? I'm no constitutional lawyer, I'm not even American, but I'm pretty the U.S. Constitution just prohibits the government from making laws that prohibit free speech. This on the other hand doesn't prohibit anyone from making any sort of game they want, it rather restricts tax credits to certain games. I don't see how lack of government support could reasonably be taken as actually infringing on a person's freedom of speech.

Promoting the free speech of nonviolent video games through tax credits can be seen as abridging the free speech of violent video games since this creates an inherently unfair marketplace of ideas.

Neronium:
And blaming just "liberals" isn't going to fix anything. Both parties are to blame for the current way things are done, and blaming just one side never gets anything done. Just like blaming only Republicans for being "too conservative", blaming Democrats for being "liberal" doesn't solve anything at all. So yes, there are some Republicans just like there are some Democrats pushing for reform, but both parties mainly won't do it because they will lose money in some way.

That's the "pox on both your houses" fallacy. They're the ones to blame, even if Republicans do it occasionally. Liberals don't want to do anything about it. Conservatives do.

Eldritch Warlord:
The pair of you need to understand that "loopholes" are not an inherent property of a progressive tax system. The extremely corporatist GOP wants a flat tax because such a system heavily favors big business and the very wealthy (and the rhetoric appeals to their simple-minded base). The slightly less extremely corporatist Democratic party favors keeping the current tax system because it to some degree obscures how heavily it favors big business and the very wealthy.

Our tax system is in principle (not execution) very good. The progressive rates mean the government can have adequate income for its needs without depriving those who cannot afford it and tax credits allow automatic adjustments based on the cost of living/doing business and provide the government a good means of incentivising beneficial behavior without unjust coercion.

A loophole is just a bad tax credit (or trade law, but that's not income tax related). Does anyone really consider claiming a dependent on your tax returns a loophole?

You believe the liberal spin. They demagogue on this issue all the damn time while proposing nothing to fix it. The GOP isn't the one so beholden to special interests.

The Dems are beholden to unions (oppose school choice and vouchers, check,) trial lawyers (oppose "loser pays" laws and tort reform, check,) and environmentalists (oppose Keystone XL pipeline and fracking, check,) among others.

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