Latest / Bloomberg Intelligence / Bloomberg's Goldman on Broadway Fight for Tax Deduction (Audio)

Transcript

Bloomberg's Goldman on Broadway Fight for Tax Deduction (Audio) · Bloomberg Intelligence

• 0:03
  Speaker 1: Global business news twenty four hours a day at Bloomberg
• 0:06
  Speaker 1: dot com, the radio, plus Globo lact and on your radio.
• 0:10
  Speaker 1: This is a Bloomberg Business flag from Bloomberg World Handquarters.
• 0:14
  Speaker 1: I'm Charlie Pellett's stocks continue to trade Laura, forty two
• 0:17
  Speaker 1: minutes to go ahead of the close on a Friday.
• 0:20
  Speaker 1: We're brought to you by Sector Spider et F s
• 0:22
  Speaker 1: Y by a single stock when you can invest in
• 0:25
  Speaker 1: the entire sector of visits sector sp d rs dot
• 0:29
  Speaker 1: com or call one sector e t F SMP five
• 0:34
  Speaker 1: hundred index heading for its steepest drop in two months,
• 0:37
  Speaker 1: amid caution over tepid global growth and a series of
• 0:40
  Speaker 1: looming events with the potential to spur renewed market turbulence.
• 0:45
  Speaker 1: Right now, the SMP five hundred index is down twenty
• 0:47
  Speaker 1: four points to drop there of one one percent to
• 0:50
  Speaker 1: two thousand ninety one. Now, let's head over to the
• 0:53
  Speaker 1: first Word desk. Let's get the latest update now and
• 0:56
  Speaker 1: here's Bill Maloney. Good afternoon, Charlie. Manuis averages have been
• 1:01
  Speaker 1: under pressure from the start today. Dall is currently down
• 1:04
  Speaker 1: a hundred and fifty nine points as if he's dropped
• 1:06
  Speaker 1: twenty four and NAZAC is lower by seventy five. The
• 1:10
  Speaker 1: small cap six hunder falls eleven points and the U
• 1:13
  Speaker 1: S ten yield drops to one point six three percent.
• 1:16
  Speaker 1: Nine out of tennesse B sectors are lower, led by
• 1:19
  Speaker 1: losses and energy, financials and consumer discretionary. Only Telecom gained down,
• 1:24
  Speaker 1: Transports dropped a hundred and thirty five points and as
• 1:27
  Speaker 1: a biotech Sinc seventy four and the VIX is higher
• 1:30
  Speaker 1: by eighteen percent. Down Leaders to the downside included Caterpillar, Goman,
• 1:34
  Speaker 1: Sacks and Boeing. Verizon led to the upside. H R
• 1:39
  Speaker 1: not Block gain thirteen percent that's most since two thousand
• 1:41
  Speaker 1: eight after earnings, while Mattress firm fell thirteen percent after
• 1:45
  Speaker 1: its results and the latest UK pole conducted for or
• 1:49
  Speaker 1: Be Independent showed fifty five percent leave fortcent remain live
• 1:54
  Speaker 1: from the first breaking news descom Bill Maloney, Charlie, all right,
• 1:56
  Speaker 1: thank you very much, billing to hear a live breaking
• 1:58
  Speaker 1: news over your Bloomberg squawk. Ask you you a w
• 2:02
  Speaker 1: K on your terminal. I'm Charlie Pelt. That's a Bloomberg
• 2:05
  Speaker 1: business flash. Mr Secretary, Mr Burns, did you hear the
• 2:10
  Speaker 1: news about good old General Musser Street. They renamed it
• 2:16
  Speaker 1: after him. The Mercer legacy is secure. Onlie had to
• 2:20
  Speaker 1: do is Die? That's a lot less work. We ought
• 2:22
  Speaker 1: to give it a try. How you're going to get
• 2:25
  Speaker 1: your debt plan through? Hamilton's a record sixteen Tony nominations.
• 2:31
  Speaker 1: That's just the snippet from the room where it happens
• 2:34
  Speaker 1: where some of the stars of this very talented cast
• 2:38
  Speaker 1: are singing one of the all the songs are so popular,
• 2:41
  Speaker 1: but certainly that is one of the big ones. Now,
• 2:43
  Speaker 1: the Tony Awards are this weekend, and as we get
• 2:47
  Speaker 1: ready for that and wait to see how many actual
• 2:49
  Speaker 1: awards Hamilton's wins. On the sixteen, it has been nominated
• 2:52
  Speaker 1: for a very interesting story written today by our own
• 2:55
  Speaker 1: Henry Goldman, Alexander Hamilton's introduced the idea of federal taxes.
• 2:59
  Speaker 1: Broad A producers, enjoying a record season, buoyed by his
• 3:03
  Speaker 1: namesake musical, are lobbying Congress to limit what they owe. Henry,
• 3:08
  Speaker 1: that's a great way to start your story. And welcome
• 3:10
  Speaker 1: to taking stock, Hi, Kathleen, It's a pleasure to be here.
• 3:13
  Speaker 1: So uh, you know who doesn't love Hamilton's And you
• 3:15
  Speaker 1: know you have any kind of friends or relatives coming
• 3:18
  Speaker 1: from out of town, everybody wants to go to Broadway,
• 3:21
  Speaker 1: which is one reason why you know New York State
• 3:24
  Speaker 1: Senator Chuck Schumer is arguing for this tax break. Tell
• 3:28
  Speaker 1: us about it. Well, it took several years of lobbying
• 3:34
  Speaker 1: and cajoling before Broadway last year was able to get
• 3:38
  Speaker 1: a tax provision passed by the Congress and signed by
• 3:43
  Speaker 1: the President that would allow investors in Broadway shows to
• 3:47
  Speaker 1: deduct their investment in the first year. And UH this
• 3:52
  Speaker 1: was something that TV and movie investors had, but live
• 3:57
  Speaker 1: theater investors didn't have. And the idea was that people
• 4:04
  Speaker 1: who were investing in Broadway shows they would actually have
• 4:07
  Speaker 1: to pay tax on what was the estimated profit that
• 4:12
  Speaker 1: a producer might include in his offering circular to the investor.
• 4:17
  Speaker 1: But it was basically an optimistic assessment of how much
• 4:20
  Speaker 1: money they might make and how soon they might make it.
• 4:24
  Speaker 1: And on the basis of that optimistic estimate, UH, an
• 4:28
  Speaker 1: investor was taxed even if the show might fail. So
• 4:34
  Speaker 1: they were able to get this past, which allowed investors
• 4:39
  Speaker 1: to first of all deduct their investment as a as
• 4:43
  Speaker 1: an expense and also avoid paying tax on so called
• 4:47
  Speaker 1: phantom income based on the optimistic assessment of the producer, who,
• 4:52
  Speaker 1: after all, is trying to sell a show in the
• 4:54
  Speaker 1: first place. Well, there's no doubt that, you know, as
• 4:57
  Speaker 1: your story points out, four or five per wormans is
• 5:00
  Speaker 1: closed without even recouping their startup costs. It's such a gamble.
• 5:04
  Speaker 1: You gotta for a lot of people, gotta have money
• 5:06
  Speaker 1: you're willing to never see again if you're going to
• 5:07
  Speaker 1: invest in a Broadway play. So why is the opposition
• 5:10
  Speaker 1: in Congress? Well, it is a gamble, but life is
• 5:13
  Speaker 1: a gamble. I mean, you know, let's say you are
• 5:16
  Speaker 1: in the biotech business and you go out and you
• 5:18
  Speaker 1: try to sell stock, either as a private offering or
• 5:21
  Speaker 1: as a public offering, and that biotech company or any
• 5:26
  Speaker 1: other startup goes belly up. Those investors lose their money.
• 5:30
  Speaker 1: And so there are people in Congress who say that
• 5:34
  Speaker 1: why should this industry, the show biz industry, get a
• 5:39
  Speaker 1: tax advantage that people in other industries don't get. But
• 5:42
  Speaker 1: did you just say that television, film, other kinds of Well,
• 5:45
  Speaker 1: that's right, I mean, but you know, we're talking about
• 5:47
  Speaker 1: glamorous professions. That this is the argument against that that
• 5:53
  Speaker 1: the glamour has sort of clouded the eyes of some
• 5:57
  Speaker 1: members of Congress, and they voted to do this, and um,
• 6:03
  Speaker 1: it's uh, that's you know, part of the argument against it.
• 6:07
  Speaker 1: So that's the argument against it. Is the argument for
• 6:12
  Speaker 1: in part that you know, we support the arts in
• 6:15
  Speaker 1: many ways. It is a constant struggle for painters, for sculptors.
• 6:18
  Speaker 1: Uh you know, so is it that different to give
• 6:21
  Speaker 1: a Broadway play which is actually theater some support as well. Well,
• 6:26
  Speaker 1: you know, it is a tough investment. We do want
• 6:29
  Speaker 1: to support the theater. The theater probably nationally provides about
• 6:34
  Speaker 1: fifteen billion dollars in economic activity to the country, just
• 6:39
  Speaker 1: live theater long. We're not talking about TV and movies here.
• 6:43
  Speaker 1: So uh, there there are arguments for it, obviously, And
• 6:51
  Speaker 1: one of the arguments is that you know, somebody who
• 6:55
  Speaker 1: starts a company like my biotech company, for example, he
• 6:59
  Speaker 1: can go to a bank, you can go to a
• 7:01
  Speaker 1: venture capitalist and get that kind of money to start up.
• 7:04
  Speaker 1: And really a Broadway showman can't do that. He doesn't
• 7:07
  Speaker 1: have those sources of capital available to him. You see Hamilton's.
• 7:12
  Speaker 1: I did see Hamilton's. I liked Hamilton's, but I'm not
• 7:15
  Speaker 1: about to promote Hamilton's. There are a lot of good
• 7:17
  Speaker 1: shows out there. There are shows that fail that are
• 7:20
  Speaker 1: really good. Well, you're you're a very lucky man, sir.
• 7:25
  Speaker 1: A lot of people would love to be in Henry
• 7:26
  Speaker 1: Goldman Shoes. I'm gonna tweet out your story. Henry Broadway
• 7:29
  Speaker 1: wants logs, longer, tax breakers, Hamilton's Prince Money. This is
• 7:32
  Speaker 1: taking Stock on Bloomberg Radio. We're going to continue to
• 7:35
  Speaker 1: listen to one of the hit tunes from Hamilton's awarded
• 7:39
  Speaker 1: her sixteen Tony nominee awards this year. This is Fig Radio, Bloomberg.
• 7:49
  Speaker 1: Taking Stock is going to be taking a look at
• 7:52
  Speaker 1: lagoons that you can put in the desert, Crystal lagoons. Yes,
• 7:56
  Speaker 1: coming up, Bomb Bloomberg Radio.