Federal Film Tax Credits Could Save an Industry That Forgot How to Compete

There’s something genuinely strange about watching Donald Trump and Adam Schiff nod in agreement about anything, but here we are. The president wants federal tax incentives for film and television production, and the California senator is basically standing up and applauding. When these two find common ground, you know the situation has gotten desperate.

Trump took to Truth Social on Monday with a straightforward pitch. Get Republicans and Democrats together, craft legislation, and save the American entertainment industry. He wants Congress to approve a federal production incentive immediately, one that would make it financially sensible to shoot movies and shows in what used to be the undisputed movie capital of the world. The man’s not wrong about the problem, even if the solution makes some of us twitch a bit.

Here’s the reality that nobody in Hollywood wants to admit out loud. They got beat at their own game. Foreign governments looked at the film industry and saw an opportunity, so they rolled out the red carpet with aggressive tax incentives and production infrastructure. Canada, the United Kingdom, parts of Eastern Europe. These places aren’t just competitive anymore. They’re winning.

Schiff laid out the numbers at a Burbank City Hall meeting, and they’re ugly. Roughly 45 percent of all U.S. films and scripted television shows are now being shot abroad. That’s up from 33 percent in 2022, which means the bleeding accelerated fast. We’re talking about 42,000 jobs gone, along with the careers and livelihoods attached to them. That’s not just some abstract economic data. Those are real people who used to work in California and don’t anymore.

The senator called for federal intervention because state programs can’t keep pace with what foreign governments offer. California has tried its own incentive programs, and they’ve helped some, but they’re band aids on a gushing wound. You can’t fight a global competition with state level resources. It’s like bringing a knife to a gunfight, except the knife is made of good intentions and Sacramento tax credits.

Now let’s talk about what this actually means from a conservative standpoint. Federal tax incentives aren’t exactly small government orthodoxy. We’re supposed to believe in free markets, not government subsidies propping up industries that can’t compete. That principle matters, and it should make us uncomfortable when we start handing out tax breaks to keep production studios happy.

But there’s another principle at stake here, one that matters just as much. American jobs. American industry. The cultural output that shapes how the world sees us and how we see ourselves. When 80 countries have adopted tax incentives as economic development tools, we’re not playing on a level field anymore. We’re playing a rigged game where everyone else changed the rules and we’re still pretending it’s 1995.

Industry leaders seem cautiously optimistic. Joe Chianese from Entertainment Partners said a federal incentive just makes sense, and it would help not just California but U.S. production generally. The way it would work is fairly straightforward. Studios and producers would get a credit or rebate on a percentage of production costs. That federal credit would stack on top of whatever state level incentives already exist in California, New York, Georgia, and other places trying to keep their film industries alive.

Production centers have flourished in Central and Eastern Europe, Australia, South Africa. These aren’t accidents. They’re the result of deliberate policy decisions by governments that wanted a piece of the entertainment economy. They invested, they built infrastructure, they created competitive advantages. Meanwhile, we’ve been sitting here wondering why Hollywood keeps looking elsewhere.

Rep. Laura Friedman, a Democrat from Burbank, jumped on board too. She wants the tax incentive legislation to pass quickly, which makes sense when your district is watching jobs evaporate. This is one of those rare moments where the political incentives actually align with the policy need, at least on the surface.

Trump floated the idea of a 100 percent tariff on films made offshore last year, which prompted industry insiders to start pushing for tax credits comparable to what Canada and the UK offer. The tariff threat was probably more stick than carrot, but it got people’s attention. Now we’re seeing the carrot version, and it’s got bipartisan support from people who usually can’t agree on what day it is.

The question isn’t whether Hollywood needs help. It clearly does. The question is whether federal tax incentives are the right kind of help, and whether we’re comfortable with the precedent it sets. Once you start subsidizing one industry to compete globally, where does it stop? What about manufacturing? What about technology? What about any sector that faces international competition and cheaper labor costs elsewhere?

Those are real concerns, and they deserve honest answers. But sometimes you have to choose between ideal policy and practical reality. Right now, the practical reality is that American film and television production is bleeding out, and doing nothing means watching it die. Whether that’s worth a federal tax incentive depends on how much you value the industry, the jobs, and the cultural influence that comes with it.

At least Trump and Schiff agree on something. That’s got to count for something, even if it makes the rest of us wonder what universe we’re living in.

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