SUBJECT: FACILITIES AND SERVICES ADMISSIONS MOVIES WITNESS: LESTER B. ISAAC, INTERNATIONAL REPRESENTATIVE, INTERNATIONAL ALLIANCE OF THEATRICAL EMPLOYEE & MOVING PICTURE MACHINE STAGE SUMMARY OF STATEMENT Seeking repeal of the 10-percent excise tax on motion picture theater admissions above $1, the witness pointed out that the tax is paid by some 2,500 large theaters, while the smaller houses which do not pay the tax bring the total number of theaters in the United States to approximately 19,000. Knowledgeable people in the industry believe that at least onefourth of the large, taxpaying theaters are in danger of closing. This would throw out of work at least 10,000 people-people who could not easily find new jobs because many of them (such as projectionists) have skills which cannot be used elsewhere, while many others (such as ushers) have a special need for part-time work at odd hours. The annual income tax paid by these people comes to approximately $1,097,000, while the general yield from the theater-admissions tax is not more than $5 million. The difference between the two figures is an insignificant sum when balanced against the economic loss and misery that follows in the wake of joblessness. SUBJECT: FACILITIES AND SERVICES ADMISSIONS-MOVIES WITNESS: ROY COOPER, PRESIDENT, NORTHERN CALIFORNIA THEATRE ASSOCIATION. SUMMARY OF STATEMENT SUBMITTED FOR THE RECORD 1. Admission taxes on theater tickets originated during emergency periods. Emergency periods have long since passed. Hardships suffered by motion-picture theaters. 2. Tax returns received are relatively small amounts. However, sums are important to individual theaters. Because of television competition, theaters have been forced to close with resultant loss of employment for young people. 3. Inconvenience and extra expense. 4. Request removal of tax, thus giving relief of inconvenience and expense. SUBJECT: FACILITIES AND SERVICES ADMISSIONS MOVIES WITNESS: HON. ROBERT WAGNER, MAYOR, CITY OF NEW YORK. SUMMARY OF STATEMENT SUBMITTED FOR THE RECORD (Prepared by staff of Committee on Ways and Means) Repeal of the admissions tax on movie tickets would help preserve the entertainment industry, which has contributed to the cultural and economic growth of New York City and our Nation. Excise tax on motion-picture theater admissions should be repealed for the following reasons: 1. This restrictive and unfair competitive burden on downtown first-run theaters is a contributing factor to the blight in the core cities of metropolitan areas. 2. Uneconomic price ceilings on movie admissions result from this tax. 3. Total revenue to the Federal Treasury from the tax on movie theater admissions is so insignificant that it cannot possibly justify the economic disadvantages which it imposes on the individual, on the community, and on the Federal Government. SUBJECT: FACILITIES AND SERVICES ADMISSIONS MOVIES WITNESS: HARRY GOLDBERG, WASHINGTON CROSSING, PA. SUMMARY OF STATEMENT SUBMITTED FOR THE RECORD (Prepared by staff of Committee on Ways and Means) Repeal of the Federal excise tax on admissions to theaters would help many of these theaters, which are now struggling to survive. SUBJECT: FACILITIES AND SERVICES ADMISSIONS MOVIES WITNESS: MARTIN H. NEWMAN, VICE PRESIDENT, CENTURY THEATRES, INC. SUMMARY OF STATEMENT SUBMITTED FOR THE RECORD (Prepared by staff of Committee on Ways and Means) Repeal of the onerous and discriminatory Federal excise tax on admissions will save many theaters which are currently facing bankruptcy. The effects of a theater closing are far reaching-such as on employment, services provided patrons, and on the community in general. SUBJECT: FACILITIES AND SERVICES ADMISSIONS MOVIES WITNESS: STEVE D'INZILLO, NEW YORK BUSINESS REPRESENTATIVE, MOVING PICTURE MACHINE OPERATORS UNION OF THE INTERNATIONAL ALLIANCE OF THEATRICAL STAGE EMPLOYEES & MOVING PICTURE MACHINE OPERATORS OF THE UNITED STATES & CANADA, LOCAL 306 PROJECTIONISTS, NEW YORK, N.Y. SUMMARY OF STATEMENT SUBMITTED (Prepared by staff of Committee on Ways and Means) We are unalterably opposed to the 10-percent excise tax on motion picture theater admissions and urge its repeal. SUBJECT: FACILITIES AND SERVICES—ADMISSIONS MOVIES WITNESS: EMANUEL FRISCH, RANDFORCE AMUSEMENT CORP., BROOKLYN, N.Y. SUMMARY OF STATEMENT SUBMITTED (Prepared by staff of Committee on Ways and Means) Repeal of the Federal excise tax on admissions is a necessity if the industry, in general, and the theaters in Brooklyn and Queens, are to survive. SUBJECT: FACILITIES AND SERVICES ADMISSIONS- WITNESS: HON. JOHN V. LINDSAY, MEMBER OF CONGRESS, STATE OF NEW YORK. SUMMARY OF STATEMENT (Prepared by staff of Committee on Ways and Means) There are compelling reasons for repealing the Federal excise tax on live dramatic and musical performances. My bill, H.R. 2518, and companion bills, would accomplish that result. Evidence is overwhelming that some form of relief as can be granted by the tax structure is needed to permit this form of art to survive and move forward on its own. Also introduced Mr. Harold Prince, president, National Association of the Legitimate Theatre, Inc., and of the League of New York Theatres. Also introduced Mr. Joel Fisher, counsel for the Theatre League. SUBJECT: FACILITIES AND SERVICES ADMISSIONS- WITNESS: HAROLD PRINCE, PRESIDENT, DAVID MERRICK, SUMMARY OF STATEMENT These two associations favor the repeal of section 4231 (1) of the Internal Revenue Code of 1954, as amended, for admissions to living theater productions and also repeal or amendment of section 4231 (4) and (5) of the code. A summary of the testimony of the witnesses for the associations is: Mr. Hal Prince, president of both of the above-named associations, and one of the Nation's leading theatrical producers and directors, will emphasize three points: (1) The living theater is caught in a serious cost-price squeeze which has resulted in a continuous decline of increasing severity in production, theater attendance, and return of investment. (2) The admissions tax is harsh, discriminatory, and unneces sary. (3) We cannot afford to let the living theater continue its present sharp decline. Mr. David Merrick, one of the Nation's leading theatrical producers, will give concrete examples of economic problems confronting the producer. He will clarify misunderstandings that have arisen with regard to production and pricing problems confronting producers. In addition, Mr. Merrick, one of the leaders in the successful fight to eliminate the 5 percent tax imposed by the city of New York, will outline advantages that will accrue to the theater patron from removal of the Federal excise tax. John F. Wharton, Esq., prominent New York attorney and author of "Crisis in the Free World Theater," will present the economic case for these associations, drawing upon his long experience in the living theater as a partner in the Playwrights Producing Co. and as a legal adviser to many of America's most important theater people. In addition, Mr Wharton will testify regarding repeal or amendment to section 4231 (4) and (5) of the Internal Revenue Code. SUBJECT: FACILITIES AND SERVICES ADMISSIONS- WITNESS: JACK GOLODNER, LEGISLATIVE REPRESENTATIVE, ACTORS EQUITY ASSOCIATION. SUMMARY OF STATEMENT I. While other nations seek to enhance their theaters as cultural institutions, the American theater has experienced a steady decline which is hastened by such measures as the 10-percent admissions tax. A. The number of professional actors and actresses employed by the American theater declined 26 percent from 1950 to 1960. B. The majority of the remaining 13,488 performers in the field find it increasingly difficult to earn a living in the theater. The Bureau of Labor Statistics is now advising talented young Americans against seeking a career in the theater. C. Equity contends that continuation of the tax is harmful to the economic well-being of the theater and the people it employs. The theater is one of the few major art forms in this country that has managed to continue as a commercial enterprise. It should be encouraged to continue in this manner and should not be burdened by the admissions tax. A trend toward nonprofit, taxexempt theater has recently developed and will grow at an accelerating pace if the commercial theater continues to decline. II. The admissions tax should be removed. A. The demand for legitimate theater is inelastic. Anything which adds to the cost of theatergoing contributes to a restriction of the theater's market. Such an added cost is the admissions tax. By helping curtail the market for live theater it contributes to unemployment in the performing arts fields and discourages many Americans from experiencing the cultural benefits of "live" theater. B. The revenue derived from the tax on legitimate theater admissions is relatively small and does not constitute a worthwhile element in the tax structure. It is estimated that less than $6. million per year is drawn from the legitimate theater. C. It is a discriminatory tax. The greater portion of movie admissions is exempt from the tax and no tax is required for viewing television performances. Thus, legitimate theater is handicapped relative to its major competitors. No economic or social policies exist to justify such discrimination. 34-720-64-pt. 6—12 |