High Taxes Killed the Movies!

Ronald ReaganThis is delicious!

Back in 1981, when the recently elected President Ronald Reagan was pushing to lower income taxes, he said something that is really great to the Washington Post. Unfortunately, that particular article doesn’t seem to be online, so I’ve had to get it from The Christian Science Monitor, No “Voodoo” in Dole’s Tax Cut.

Are you ready, because this is really great. Wanna get a beer? Some popcorn? Okay, here we go:

When I was in the movies, I would reach the point each year when, after the second movie, I’d be in the 90 percent bracket, so I wouldn’t make any more movies that year. And it wasn’t just me. Bogart and Gable and others did the same thing.

There’s a serious part of the this, but let’s just bask in the glow of that false equivalence. The great Hollywood stars: Bogart, Gable, and… Reagan?! You gotta give it to the guy, he didn’t lack for confidence. Let’s see now: Bogart starred in Casablanca and The African Queen. I assume you’ve heard of those. Gable starred in the Oscar sweeping It Happened One Night (also one of my very favorite movies) and a little sleeper called Gone With the Wind. And Reagan starred in (well: co-starred in) Knute Rockne, All American and Bedtime for Bonzo. For the record, Bonzo Goes to College was far better, but Reagan wasn’t in it. Not that I’m implying anything!

But the truth is that the high tax rate was not actually limiting Bogart and Gable from making films. From 1936 onward, the top marginal tax rate was at least 9 percentage points higher than it was when Reagan was complaining about the tax rate in 1981. But Bogart wasn’t making two pictures per year. Of course, he really didn’t become a star until High Sierra in 1941. But from 1945 onward, when he was a big star and the top tax bracket was 90% or more, he made a lot of films. In 1953, with a tax rate of 92%, he made three big pictures: The Caine Mutiny, Sabrina, and The Barefoot Contessa.

Similarly, with Gable, who was a star much earlier, he made five films the year he won the Oscar for It Happened One Night. He only made two the year of Gone With the Wind, but that isn’t surprising since the principal photography for that one film took up over half the year. Regardless, you know that if it took Reagan two films to reach the 90% tax rate, that Bogart and Gable reached it in one film easily.

But if you look at stars today: Johnny Depp or George Clooney, they also make about two films per year. This is despite the much lower top marginal tax bracket and the much lower capital gains rate, which they get as being executive producers.

What’s especially interesting though, is that Reagan was lying about himself. Throughout the 1940s and early 1950s (after which he got into television), he made tons of movies. So I don’t even know what he’s talking about. Maybe the dementia was already strong in 1981.

Reagan went on to talk about how the fact that he wasn’t willing to make more movies meant that grips and other movie professionals were hurt. The idea I guess is that rather than find another actor, the studio would just not make a movie because people only wanted to see a chimp work with Ronald Reagan. The studios make what the studios make. If George Clooney dies tonight, Hollywood will make exactly the same number of pictures next year.

Anyway, I thought that quote was funny as hell and I had to share it. It is weird though, that conservatives always talk about how liberals don’t see the world as it is. But they just make up stories to prove their points. If we were to believe Reagan, To Have and Have Not never would have been made, because the top tax rate was 94%. What was Bogart thinking!

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About Frank Moraes

Frank Moraes is a freelance writer and editor online and in print. He is educated as a scientist with a PhD in Atmospheric Physics. He has worked in climate science, remote sensing, throughout the computer industry, and as a college physics instructor. Find out more at About Frank Moraes.

0 thoughts on “High Taxes Killed the Movies!

  1. Memory says Reagan was actually being considered for starring role in Casablanca before the decision to go with Bogart. It was kind of a role-changer, since Bogart was mostly familiar to audiences of the time as a heavy.

    So, in an alternative history, RR’s dreams might have become a reality. He’d have become a really famous movie star! And Humphrey Bogart might have gone on to settle for being President.

    Gotta be a decent novel in that idea …

  2. @mike shupp – Two things about that. First, it was common for studios to release statements like "RR to star in upcoming [i]Casablanca[/i]." The film was always meant to be Bogart’s. What’s more, it was coming right off of [i]The Maltese Falcon[/i] where he plays much the same character.

    Second, if Reagan had starred in [i]Casablanca[/i], no one would remember it as a great film. Unless, of course, Ugarte was played by a chimp.

    I like this alternate reality: Reagan dies of cancer at 57. But to some extent I feel that we were bound to have someone like Reagan.

    I am working on an article. The total federal income plus payroll taxes paid by the median America went [i]up[/i] during Reagan’s presidency, and that’s saying nothing of unearned income. All Reagan really did was make the rich pay less in taxes and the poor pay more.

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