New World Man

This is one of the sickest things I’ve read in a while.

As paradoxical and absurd as it sounds, it’s cheaper for a Hollywood studio to make a big-budget action movie than to make a shoestring art film like Sideways. Consider Paramount’s 2001 action flick Lara Croft: Tomb Raider. On paper, Tomb Raider’s budget was $94 million. In fact, the entire movie cost Paramount less than $7 million. How did the studio collect over $87 million before cameras started rolling?

First, they used the German tax-shelter gambit. Loopholes in Germany’s tax code are responsible for a good portion of Paramount’s profits–an estimated $70 million to $90 million in 2003 alone. Best of all, there’s no risk or cost for the studio (other than legal fees).

Please governments of the world, please, just stop.

This entry was posted on Tuesday, May 3rd, 2005 at 13:43 and is filed under economics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.