Violent game makers would be denied tax credit under new reform blueprint

Plan for top-to-bottom overhaul of American tax system says developers of "violent" video games should be prevented from qualifying for an R&D tax credit.

by

The United States Congress this week released a blueprint for a top-to-bottom overhaul of the American tax system, offering up a variety of tax benefits for businesses. That's the good news. But the document, released by the House Ways and Means Committee, also calls out one major potential problem area for video game developers like Activision and Electronic Arts.

The Tax Reform Act of 2014 includes an "improved, permanent R&D tax credit," which architects of the blueprint like Rep. Dave Camp (R-Michigan) say will give American companies the "certainty they need to compete against their foreign competition who have long had permanent R&D incentives."

However, on page 24 of the Tax Reform Act of 2014, the document plainly states that this R&D tax credit will not be available for companies that make "violent" video games. The blueprint includes a provision for "preventing makers of violent video games from qualifying for the R&D tax credit." It's unclear what parameters would be used to decide what is "violent" and what is not or why video games were specifically called out.

The very next page of the document states that the Tax Reform Act of 2014 will close loopholes and stop the practice of using the tax code to "pick winners and losers based on political power rather than economic merit." But, as The Washington Examiner points out, if every industry gets to keep the R&D tax credit except the video game business, how is that not picking winners and losers?

In a landmark 2011 decision, the United States Supreme Court ruled that video games--violent or not--are a form of art and are entitled to freedom of speech protections. The removal of the R&D tax credit for violent game developers would no doubt face an uphill battle given this precedent.

House Speaker John Boehner (R-Ohio) said Wednesday that he would welcome the beginning of a discussion concerning tax reform, but made clear that Congress isn't likely to make any real moves on the subject this year.

Video games have been a topic of discussion in Washington for a long time, but the debate has risen to the fore following the December 2012 Sandy Hook massacre in Connecticut. US president Barack Obama has even ordered research be conducted into the connection between gaming and violent behavior.

Eddie Makuch is a news editor at GameSpot, and you can follow him on Twitter @EddieMakuch

Got a news tip or want to contact us directly? Email news@gamespot.com

Discussion

352 comments
Unfallen_Satan
Unfallen_Satan

I hate this kind of underhanded obfuscation in politics. The uncertainty in the bill's language is no accident, and in all likelihood tax reform isn't even the point of denying tax credit to "violent" video game makers.

dpclark
dpclark

Flash!  It has been determined by the Surgeon General that smoking is bad for your health.

Flash!  Obama still smokes.

Flash!  More tax funded studies needed.

Flash!  Bad economy not improving under 6 years of Obama.

Flash!  More tax funded studies needed.

Flash!  Drones kill innocent civilians.

Flash!  Obama still killing innocent civilians.

Flash!  More tax funded studies needed.

zpluffy
zpluffy

Epic Fail once again. This won't prevent violent games from being made. All these industries need to do is to make these types of games outside America and hire people there. CEOs will still get richer while hiring people out of the country instead of Americans. They are just screwing the country. Objects don't kill people, people kill people.

Nepti
Nepti

It seems like most of you commenting here haven't been around long enough to understand that politicians like to talk about overhauling the tax code. But in my entire lifetime of politicians talking about overhauling the tax code, it's never been actually overhauled. Nothing's going to change except perhaps taxes will go up, but that's about it.

Damnation_6
Damnation_6

Republicans vote no on laws that would make background checks possible when buying guns even tho 90% of Americans want background checks. But digital guns are bad it seems the (current) GOP shows they are a bunch of evil, greedy, corrupt hypocrits that only cater to white middle ages men (and older) and have lost all contact with reallity.

Stupid hypocritical politicians...that's what makes me agressive...

tightwad34
tightwad34

Money talks and the video game industry has a lot of it so I would think this will just get swept under the rug. I hate to say that, but it's true and we all know video games are not to blame for real life violence.

bunchanumbers
bunchanumbers

excellent. In the next CoD people will tear each other apart with their bare hands. Tax Break here we come!

kouji03
kouji03

Violent movie makers etc should as well be affected not just games if they were to this. though i still think this is wrong what does "violent" mean because most of the game i know are violent. 

ClevernameX
ClevernameX

This is the most violently stupid thing I've heard, worse then anything I've ever seen in a video game.

frogiggy323
frogiggy323

Problem is this is a vague concept.  Are they going by what the ESRB rated violent?  Because 90% of games have some sort of violence warning.  Or are they just trying to send tech jobs overseas as well?  

tonytones21
tonytones21

FAIL tax law is a FAIL!... and stupid.

Henninger
Henninger

This won't pass. Thats the dumbest shit i've heard in a long time. If you make a violent game then you don't get a tax credit. That's 99% of the industry. & they have to define violence. Super Smash Bros isn't gory or over the top but its still considered violent. So what about a racing game where they crash into ppl on purpose? Thats vehicular manslaughter. That's violent too!! So EA, Activision, Capcom, Ubisoft, Microsoft, Nintendo, Sony, Naughty Dog, Ready At Dawn, Valve Etc etc will be fucked over because of this law?!?!?! WTF! There's no way that this gets made into law. This would literally put companies out of business. So the government official who decided this should be a law can go fuck himself.

Pawfalcon
Pawfalcon

I for one am all for this. Just as soon as they apply this to movies, tv, books, music, and every other form of entertainment. That or show substantial evidence that violent video games cause clear harm to... well, anyone. Or just give a reason that makes any kind of sense. "Because we're all jacka**es up here on this here hill" does not count, even if it is true.

toddx77
toddx77

Funny how only video games are mentioned.  No violent movies, comics, novels, or tv shows.  So by this logic if a war movie has a game tie in then the makers of the game don't receive a tax credit, but the makers of the movie do?

Angrypcgamenerd
Angrypcgamenerd

Very controversial indeed.... Denying a tax credit due to violent video games is wrong - especially with multi-game companies. Besides, there is no company that does not create violent video games except for Nintendo.... Besides, why couldn't the movie industry get hit as well? But oh well..... That's the way broken America is. In Canada, there is no such ruling like that. Manufacturers could still get the credit - and still produce violent video games.

GalvatronType_R
GalvatronType_R

Why doesn't Congress apply this same standard to violent movie makers in Hollywood?  It's simple, Hollywood employs more lobbyists than the game industry and bribes... I mean donates more money to politicians' campaigns than the game industry does.

mos2000
mos2000

I'm just curious if the same tax denial is being applied to "violent" movies/shows, being that these are consumed by people -- even children -- at a much higher rate. Due to their close ties to both parties and the tons of lobbying money poured into Washington, I bet not..

gamerboy100
gamerboy100

There is no evidence that proves beyond a reasonable doubt that violent video games are harmful to people. I am sick of them being singled out all the time when other media can be just as violent or worse, and these people need to shut the hell up!

obsequies
obsequies

COD must paying for these unnecessary wars 

hystavito
hystavito

I wonder if companies that make weapons would also not be allowed to claim that credit? :)

nparks
nparks

We need to depoliticize the tax code and ditch virtually all of these special expenditures and exemptions.  They just make for legalized corruption or opportunities for politicians to try and impose their personal morality on the nation through economic policy.  Neither is a good thing.

If a tax credit is to be justified, it should be on purely economic terms:  that it helps the economy.

zpluffy
zpluffy

Video game industries are the few companies that pays Americans high wages. And now they want to push these industries out of the country. The White House should stop worrying about their own personal agenda. This is just stupid.

rasterror
rasterror

But what if I wanted to play as the good guy with a gun that kills terrorist Muslims and brown people? I bet the Republicans would be for that.

galactic88
galactic88

@Nepti  ............Aaaaaaaaamen. They talk about overhauls every couple years, and nothing ever comes of it.

Damnation_6
Damnation_6

And the Democrats arn't much better mind you. They are misguided at best or a corporate puppet at best. I hope Americans can get the corrupting money out of politics. "money = speech" oh so rich people have more to say because they are rich is it? What a joke.

wallacom
wallacom

@ClevernameX  I dont think corps should even get tax credit as their tax is lower then the average worker.

BlazingSpeed
BlazingSpeed

@Henninger If this does pass it could very well push most of the video game industry out of the US much like Governer Rick Snyder did when he refused to give a tax break for a few start up video game companies in the state of Mi a couple of years back naturally the developers went somewhere else.


Just a heads up to let you know that this tax crap passing is a possibility a very very low possibility yes but still...  

noladem504
noladem504

@nparks  ^^ nailed it ^^
I am all for a flat tax. But that would remove a valuable tool of the power-hungry sociopaths in government. 

zpluffy
zpluffy

@rasterror  


*facepalm

DarkKnight94
DarkKnight94

@Damnation_6  I agree. Money in politics has corrupted both parties. The argument to get money out of politics is bipartisan and affects all of us. Have you heard of [http://www.wolf-pac.com/]? It would be awesome if you could visit the site and sign the petition if you haven't before. Lets get money out of politics together!

ClevernameX
ClevernameX

Agree, but the government has been on the " violent video games are bad" kick for quite a while, and pick this as some sort of punishment for destroying the minds of the youth. That's what is stupid. Agree with what you said though.

noladem504
noladem504

@rasterror @zpluffy  Selective taxation is counter-productive of a free market and insults the concept...but you knew that already.

rasterror
rasterror

@noladem504 @rasterror@zpluffy Brunei and Bahrain are in the top 10 for lowest murder rates and they're Muslim states. So isn't the UAE. And Qatar, and Tunisia, and Saudi Arabia. you know who has the highest? Nest to India it's Brazil, a christian country. Mexico, and USA and Russia. Now i know facts and proof don't bode well for you so I hope this doesn't hurt your brain. Now do you have anything that proves me wrong you'd like to share?

noladem504
noladem504

@rasterror @noladem504 @zpluffy  

Thought so...you are lying your ass off. LOL...I love it when you brainwashed types pretend to have done the research to people who really have. BUSTED! lol.
Go do your homework, i am done with this ridiculousness.  

rasterror
rasterror

@noladem504 @rasterror@zpluffy Sure do. I've actually read the Quran before. It's funny that some of the least violent countries in the world are predominantly Muslim and that the most violent are predominantly Christian. 

noladem504
noladem504

@rasterror @noladem504 @zpluffy  So basically you are telling me that you have no experience dealing with fundamental islam, and no knowledge of Islamic history? 

I kinda guessed that.

rasterror
rasterror

@noladem504 @rasterror@zpluffy You mean the $3 trillion plus that America wasted on on false pretenses? Or the multiple laws that Republicans have tried to pass to ban the rights of non Christian religions specifically targeting Muslims? Or the Republican propaganda station Fox News that uses lies to debase Muslims?

rasterror
rasterror

@zpluffy @rasterror I got it. We can make an NRA game or game about the war on the Muslim terrorist and everything will be okay. I bet they would push to give it an E rating.

toddx77
toddx77

@mos2000 @rasterror @noladem504  Very well said Mos2000.  These news networks are just as bad as the politicians.  Going on about how their competition is biased, but acting like their bias is ok because they are on the "correct" side.  Pathetic.

toddx77
toddx77

@rasterror yeah because MSNBC is totally unbiased. News channels like Fox and MSNBC only exist to give you the feeling you beliefs are right and the other sides are wrong.

mos2000
mos2000

@rasterror @noladem504Uhmm.... a dose of reality my friends...


Whether your a leftist loon spray painting fur coats and tuning into MSNBC or a Right wing wack job spittin tobacco into a soup can and watching Fox News, none of these mother -----s... and I mean NONE of these politicians give a sh-- about you. 

Every party spews nothing but bs and pulls political stunts that brainwashes voters to get them to the polls, so they can stay in office and collect a fat check from the exact same interest groups - There's NO exceptions...


With that said both parties has you THE GAMER in their sights.  YOU are the scapegoat whether you pledge allegiance to any of these fraudulent parties or not. 

Now the two of you can continue to spew rhetoric from each of these so called stations at each other, and watch your choices as a gamer continue to be attacked -- or you can realize that if you have any, your gaming interests are separate from any politician and the political theology you think you share with them.

After realizing such, hopefully you'll put your petty differences aside and at least join forces to stop the madness towards gaming exhibited by both parties. Period.

rasterror
rasterror

@noladem504 @rasterror Sorry for trying to dumb myself down to your level of reasoning. I mean you quoting MTV a source of new and information must mean you're a tween or maybe 19 at the oldest.

noladem504
noladem504

@rasterror @noladem504  Yet you refer to them as "so-called" taxes? WTF is wrong with you? You better start lying and saying your a child being you'll at least have an excuse for the level of stupidity. 

rasterror
rasterror

@noladem504 @rasterror I was just thinking that you would know more than I. I mean I probably pay around $12,000 a year in taxes but seeing that I'm just a child in your eyes I must think I'm depositing it into a savings account.

noladem504
noladem504

@rasterror @noladem504  so-called taxes? I pay taxes every year you idiot. They are only "so-called" to children still living off of Mommy's teet.

noladem504
noladem504

@rasterror @noladem504  if you dont watch it than how would you know? ...because MTV tells you so LOL. 
Go learn a little about life and taxes before making an ass of yourself.