Can We Call This "The Michael Jackson" Subsidy?

[NashVegas]

http://nashvillecitypaper.com/index.cfm?section_id=10&screen=news&news_id=54810

A new stream of cash is trickling into the growing Music Row-oriented financial industry as a result of legislation that went into effect in January, executives say. And that trickle is expected to grow to represent at least tens of millions of dollars each year, if not hundreds of millions.

The source? Lower taxes on sales of songwriter catalogues. A recent change to the federal tax code has increased the amount of money songwriters get from selling their catalogues by about 20 percent, resulting in an annual increase in cash traveling through local banks.

I wouldn't get too excited for this new bonus for songwriters, but only because of this:

Steve Bogart, president of the NSAI, said he sold a catalogue of songs to a music publishing company in the late 1990s, before the change. Bogart paid more than 40 percent of the sale – close to $500,000, he said – in taxes.

Shortly after the sale, the publishing company sold a catalogue including Bogart’s songs to AOL and paid a 15 percent tax, because the writer of the songs was not the selling agent.

Okay, but here's where it gets flakey. One might even say, outrageous:

The legislation also created a benefit for catalogue purchasers that has led to more investment dollars flowing into the industry. After the Act was passed, Smith said, an entity that purchases a publishing catalogue from a songwriter can deduct its purchase price over the course of five years – for example, the purchase of a $5 million catalogue would result in a tax deduction of $1 million per year for five years.

So, basically, a speculator in publishing can buy a catalog and be refunded 100% on their investment by taxpayers. What an unfuckingbelivable giveaway!


Who here wants to start an investment fund?