Tax Breaks Boost Makers of Video Games
The American video game industry is receiving more in tax subsidies than most of their entertainment peers. Reportedly, game developers and publishers within the U.S. can take advantage of not only tax breaks for software development and entertainment, but for online retailing as well making the business of game creation more attractive. Many believe that since the U.S. domestic sales of video games are so strong (approximately $15 billion per year) it is an industry that does not need incentives or subsidies. Others believe that without these incentives, the U.S. would lose out to other countries who heavily subsidize technology companies within their borders. It will be interesting to see how the current economic climate will affect policies like this one in the near future.
Many tax policy analysts say the breaks for the video game industry whose domestic sales of $15 billion a year now exceed those of the music business are a vivid example of a tax system that defies common sense. Most times, subsidies begin as a way to nurture a fledgling industry that will not be profitable for years or to encourage a business activity deemed to have a broad benefit to society, like reducing pollution or improving public health.
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