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Studios Take Hit in Tax Bill

Three months after Hollywood slapped the Republican Party by hiring Democrat Dan Glickman to head its Washington trade association, Congressional Republicans sliced more than $1 billion in tax credits for movie studios from a far-reaching international tax bill that the House and Senate plan to take up today.

Though the tax credits for Hollywood were included in a version of the bill approved by the Senate this summer, a Republican-dominated conference committee voted Tuesday evening to leave the provisions on the cutting-room floor.

Led by Ways and Means Chairman Bill Thomas (Calif.) and Majority Leader Tom DeLay (Texas), House GOPers on the conference committee voted as a bloc to oppose the tax breaks, calling them bad policy and too expensive to be included in the $140 billion bill.

But other lawmakers, Congressional aides and movie industry lobbyists said Republicans refused to fight for the Senate tax credits in order to punish Hollywood for hiring Glickman, a former House Member from Kansas and secretary of Agriculture under then-President Bill Clinton, to head the Motion Picture Association of America.

“The Glickman thing is going to cost them. No Republican will fight for the movie industry,” said one GOP lobbyist for the industry.

Another Republican lobbyist added: “They were not overly helpful to Republicans, so Republicans don’t want to be overly helpful to them.”

Thomas, the chairman of the conference deliberations, declined to comment on the motivation for removing the tax credits for the movie industry.

“I don’t deal with rumors and unconfirmed reports,” he said.

DeLay said he voted against the provision because “it just cost too much.”

When asked whether the MPAA’s move influenced his vote, DeLay said that employment decisions in the private sector “don’t enter into our consideration. That’s the first time I ever thought of Glickman.”

A spokeswoman for the MPAA declined to comment on the vote.

Despite DeLay’s comments, Glickman was on the minds of other Republican lawmakers in the past few weeks as votes on the tax bill neared, according to Republicans on the Ways and Means Committee.

Before the vote, Rep. Mark Foley (R-Fla.), a key Hollywood advocate, said he worried that GOP resentment about Glickman’s hire could scuttle the tax credits for the studios.

“Thomas has said some things. I’ve heard a lot of grumblings. They have said that they thought that a Republican should have gotten” the job, Foley said. “Mr. Thomas has to acquiesce to the Senate language and right now that doesn’t look good with the lingering resentment. That’s probably a tough sell right now.”

Foley added that the movie studios “may get dealt a bad hand, but I’m not sure it’s based entirely on Mr. Glickman.”

Rep. Jim McCrery (La.), a top Republican on the Ways and Means Committee and a member of the conference deliberations on the tax bill, said he did not think Glickman’s hire was “a deciding factor” in the decision by Republicans to exclude the movie studio tax credits.

Still, he acknowledged that Republicans on Capitol Hill were upset the MPAA tapped a Democrat for the position.

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