President Donald Trump has proposed creating a federal tax incentive program to encourage Hollywood movies and TV shows to be produced in America. This idea is based on existing state programs, which have spent $25 billion in taxpayer money over two decades but often returned little to no revenue. Critics argue that these incentives don't create many new jobs and are driven by the desire for lower labor costs abroad. The proposal would likely face opposition from experts like Michael Thom, a professor at USC, who says tax incentives for film production have been a net negative in several states.
Written by the local model on 2026-09-06,
using this article's own text rather than the other coverage of the
same event (that is the story summary below).
Story summary
President Donald Trump wants to create a federal tax incentive program to encourage movie production in America, claiming it will benefit the entire country and generate tenfold returns on investment. This idea is based on state-level subsidies, which have been widely criticized for not generating sufficient revenue. In fact, a review found that some states' tax credits returned only 3-31 cents for every dollar spent, while others created just 19 cents in revenue for each dollar invested. Despite these dismal results, Trump believes taxpayers should pay Hollywood to make movies in America, citing the benefits of creating entertainment jobs and generating income for the Treasury.
Written for “State and Federal Film Incentives” on 2026-09-07,
grounded in this article and the 0 other(s) covering the same event.
President Donald Trump wants taxpayers to pay Hollywood to make movies in America.
asserted
taxpayers → want → America
The crux of the president's idea, announced in a Truth Social post on Monday, is to create a "Federal Production Incentive to create Entertainment Jobs in America."
asserted
crux → announce → America
Trump claims the tax break for Hollywood would "benefit ALL of America," and that any money "spent on Tax Incentives will be made up tenfold by the money pouring into the Treasury's coffers."
Subsidizing movie production is not a new idea.
uncertain
Subsidizing → claim → production
In 2024, The New York Times reported that states had doled out $25 billion in taxpayer money to the film industry in the past two decades.
asserted
states → report → decades
In 2025, a review by the Maryland Department of Legislative Services found that, over a decade, tax credits provided to the film and TV industry in eight states returned between 3 cents and 31 cents for every dollar.
asserted
credits → find → dollar
In Georgia, Reason's Joe Lancaster found that the tax incentives offered to the film and TV industry created just 19 cents for each dollar spent.
asserted
incentives → find → dollar
The few jobs that were created through the program cost the state $160,000 each.
asserted
that → create → 160,000
There's "no reason to think a federal incentive would work any differently from state incentives, meaning that it would cost a lot of money and generate very little tax revenue in return," Michael Thom, a professor at the University of Southern California, tells Reason.
asserted
Thom → be → Reason
Thom adds that countless studies show that "tax incentives for film and television production don't create many new jobs."
asserted
incentives → add → jobs
Trump's call to further subsidize the industry not only ignores economics, but also misdiagnoses why producers are increasingly choosing to film overseas: labor costs.
asserted
producers → subsidize → economics
In 2024, 29 percent fewer movies and TV series with budgets above $40 million were shot in the U.S. than were in 2022, according to The Wall Street Journal.
uncertain
movies → shoot → Journal
In the U.K., 16 percent more movies and TV series with budgets above $40 million were shot.
asserted
movies → shoot → million
Even though Georgia offers a similar tax credit, more studios are choosing to film in the U.K. because "workers there are generally paid less, and studios don't have to cover their health insurance," per the Journal.
asserted
studios → offer → Journal
In 2023, members of the Screen Actors Guild–American Federation of Television and Radio Artists (SAG-AFTRA), the largest Hollywood union, went on strike for four months before agreeing to a new contract that included $1 billion in new compensation and benefit funding for union members, and restrictions on the use of AI in production.
asserted
that → go → production
Two years after the strike, an NPR report showed "production never returned to pre-strike levels when streamers were ordering lots of content."
asserted
streamers → show → content
In July, a report by FilmLA Research found that "tax incentives for film and television productions have not been enough to counter a still-sluggish environment for filming in the greater Los Angeles region."
asserted
incentives → find → region
According to Thom, the recent nationwide decline in employment in the industry "dates back to the SAG-AFTRA strike and the new contract that followed.
uncertain
that → accord → strike
If shooting in America requires an extravagant production budget—largely driven by labor costs—studios will opt for other locations that improve their margins.
With the advent of streaming channels and user-generated content, it's difficult to see a bounceback on the horizon.
asserted
it → shoot → horizon
"Americans are increasingly spending their time streaming already produced content or watching user-generated videos on YouTube and TikTok instead of watching films on network or cable television," Thom wrote in a policy brief for the Mackinac Center earlier this year.
asserted
Thom → spend → Center
Americans aren't suffering from a dearth of available content, and studios don't need taxpayer money to make good movies.
asserted
studios → suffer → movies
Trump's proposal to further subsidize the film and TV industry is a solution in search of a problem.
asserted
proposal → subsidize → problem
Viewers don't care if what they're watching was made in the U.S. or the U.K.; they just want to be entertained.
asserted
they → care → U.S.
