From Elizabeth Warren to Joe Biden: How the Presidential Candidate Tax Plans Impact Hollywood

6:15 AM 10/11/2019

by Rebecca Sun

The Hollywood Reporter consults economic experts to determine which Democratic contender will be best for Hollywood's earners big and small.

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  • Bernie Sanders

    "Bernie Sanders is talking about a lot of universal programs — college, health care — and he's got to find money to pay for that," says Klowden. Unluckily for Hollywood's high earners, Sanders knows just where to look. He's promised to target those with a net worth of more than $32 million with a progressive tax rate that starts at 1 percent and grows to 8 percent for households worth more than $10 billion. To enforce this rule, the IRS would create a national wealth registry and audit all billionaires' returns. And to stop those billionaires from ducking the tax man by leaving the U.S., Sanders would implement a 40 percent exit tax on assets valued under $1 billion and 60 percent on assets worth more than $1 billion. "Both Sanders and Warren consider wealth inequality to be a big deal," says Klowden. "They're going to make a statement on that. They'll go after capital gains and other income."

  • Elizabeth Warren

    Her Ultra-Millionaire Tax is a bit like Bernie's — it calls for 2 percent on households worth $50 million and up, with an additional 1 percent surtax on billionaires. Also like Sanders, she would levy a 40 percent exit tax on net worth more than $50 million. "You have to assume that Warren and Sanders [are] least favorable [to Hollywood]," says Klowden. "Both will push for increasing marginal tax rates." Thornberg agrees, but points out that Warren has been finding support in Hollywood anyway. "Voting against your own personal interest is not unique to rich liberals," he notes. "Liz Warren was one of the creators of Dodd-Frank, which had some good things but also some crappy things. It froze millions of Americans from homeownership and it created bigger wealth inequity. But people's political choices don't necessarily line up with their economic choices. There are broader social goals."

  • Joe Biden

    He's declared that his first move as president would be to reverse Donald Trump's reductions of the tax rate for the top bracket from 37 percent back up to 39.6 percent. Another bummer for one-percenters: He's also promised to tax capital gains as ordinary income (they are currently capped at a 20 percent rate), while capital gains for heirs would be taxed based on how much the asset has appreciated since it was originally acquired, not when it was inherited. Still, of the major candidates, Biden is the one who is least likely to give Hollywood moguls major headaches. "There's a sense that [he's] going to be more moderate," says Kevin Klowden, executive director of the Milken Institute's Center for Regional Economics and California Center. "Your Bidens, your Cory Bookers, your Klobuchars and Pete Buttigieg, they're not going to be as aggressive in going after high income brackets."

  • Kamala Harris

    Her tax policy is mostly focused on the lower and middle classes, with a tax credit of up to $6,000 for couples who earn less than a combined $100,000 ($3,000 for singles making less than $50,000) as well as a renters' tax credit for tenants who make less than $100,000 ($125,000 in high-cost areas) and spend more than 30 percent of their income on rent. That's not going to help anybody buy a new yacht, but it could be good news for Hollywood's below-the-line workers. "Tax battles are typically waged between the ultrarich and the almost rich, and everybody else is on the sidelines," notes Chris Thornberg, founding partner of Beacon Economics. "Parsing the Democratic proposals, you have to ask, are they trying to benefit their [lower-income] base, or are they about kowtowing to the almost rich by helping doctors with their $2 million home more than helping people who rent?"

  • Andrew Yang

    Yang's signature proposal — his $1,000-a-month Freedom Dividend to every American over 18 — may sound pretty radical, but he may not be all that bad a president for Hollywood. "Andrew Yang at his heart is a businessman, and he's unlikely to be as aggressive [in taxing wealth] as some others," speculates Klowden. Agrees Thornberg, "The basic idea of doing away with all these other social support programs — food stamps, welfare — and everybody gets a check every goddamn month, it streamlines all sorts of things." Still, Yang will have to find a way to pay for all those thousand-dollar checks. He says the money will come from levying a European-style 10 percent value-added tax, eliminating the Social Security cap, taxing financial transactions and lowering capital gains and carried interest tax rates (which would instead be taxed as ordinary income).

    This story first appeared in the Oct. 9 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.