Hollywood tax breaks proposed

The X-Files was originally shot in Canada

Two US politicians have proposed tax breaks in an attempt to stop TV and movie productions going to Canada or elsewhere.

A recent study estimated that "runaway production" cost the US as a whole $10 billion, as studios seek to save cash by taking advantage of more generous tax regimes elsewhere.

Recent Hollywood films shot in Canada include leading Oscar nominee Chicago, Catch Me If You Can starring Leonardo DiCaprio and George Clooney's Confessions of A Dangerous Mind.

TV hits which moved to Canada include The X-Files, Smallville and 24.

If passed, the new law would offer a 25% wage tax credit to each employee on wages of up to $25,000.

'Incentives'

Republican David Deier and Democrat Howard Berman, who both represent areas in California, hope it would match the tax breaks offered by Canada, Australia, New Zealand, Mexico, Ireland, and other countries.

"Countries like Canada are providing tax incentives that make it cheaper for productions to work north of the border," Mr Drier said.

"Runaway production" costs the US economy billions

"We need to be able to compete by making it just as enticing to do that work here at home."

"When productions head to countries like Canada, they take American jobs with them," he added.

"It's the caterers, florists, retailers and truck drivers that suffer as a result of runaway production."

Mr Berman, who represents North Hollywood in the US House of Representatives, said the problem was destined to get worse.

"The sound stages, editing facilities, and increased experience of Canadian crews makes it easier and easier to shoot films and TV there."

Lost revenues

The bill could cost the US government between $200m and $400m annually in lost revenues, Mr Berman estimates.

Campaigner Brent Swift, whose Film And Television Action Committee is fighting runaway production, said he had been told it could cost $1 billion a year.

He said: "More power to them, if they can make it happen. The problem is, where is the money coming from?"

His group wants the Canadian tax credits to be declared illegal - which could lead on trade tariffs being slapped on Canadian-made productions when they are being distributed in the US, a proposal the industry rejects.

On Tuesday, Chicago mayor Richard M Daley said he was proud of the film which bore his city's name, but sad it was filmed in Canada.

"The movie is great - too bad it wasn't filmed in Chicago," he said.

"We do the creative and the financial work, why should we send the production work overseas?," he added.

"Our priorities should be keeping people working in the film industry right here."