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Tax incentives for video games?

September 28, 2011
Westfield Republican
A variety of businesses benefit from government incentives ranging from tax breaks to outright grants. Solar energy equipment manufacturers, farmers, the sugar industry and automobile companies are among beneficiaries of Uncle Sam’s largess.

So is the company that distributes “Dead Space 2,” a video game in which the object is to kill space zombies. The company, Electronic Arts of Redwood City, Calif., has every reason to believe the game will rake in tens of millions of dollars. Electronic Arts is responsible for several “hit” video games and is distributing millions of copies of “Dead Space 1.”

Electronic Arts is among companies cashing in on tax incentives intended to encourage technological innovation. According to The New York Times, the company reported $1.2 billion in profits throughout the world during the past five years, while paying just $98 million in taxes in countries where it operates, including the United States.

Also according to the Times, the U.S. government dished out $123 billion in tax incentives last year. They were handed out for a variety of purposes, including to encourage development of new technologies. Apparently video games fall into that category in Washington.

Clearly, some incentives and tax breaks went to companies that didn’t need help. General Electric, for example, reported $5 billion in profits from U.S. operations last year — without paying a dime in income taxes.

Obviously, the U.S. tax code is rewarding quite a few big businesses that don’t need help — as well as some responsible for goods and services most taxpayers probably don’t think need any encouragement. Somehow, we don’t think Americans are going to be worrying much about shortages of video games.
 
 
 

 

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