Normal Pangs

On second thought, Britain's 75% tax on Hollywood films (TIME, Aug. 18) did not seem as dreadful to producers as it first appeared. Hollywood's sharp pains faded to twinges as it mulled over several reassuring facts.

One was that U.S. companies have enough unused and untaxable films in Britain to bring in money for at least six months (only those films which were imported after the tax was announced are subject to it). Another was that Britain's tax, although set upas an import duty, seemed in effect an income tax--and therefore in violation of an Anglo-American agreement designed to prevent double taxation on incomes. Hollywood felt that perhaps Britain could not make the tax stick.

British producers pointed out that because of Hollywood's six-month supply of films in Britain, the tax would not accomplish its purpose of immediately easing the drain on Britain's dollars. By the time it got around to doing so, they feared that the British film industry might be the real loser. Most cinemoguls on both sides of the Atlantic felt that the tax was mainly a bargaining point which Britain had readied for this week's conference on relaxing the terms of its loan from the U.S.

A compromise seemed in the wind. But even if none were reached, said the Manchester Guardian judiciously, the results might not be all bad. "Then the notion that a good film must cost more than it can earn at home will have to be deflated. That will do Hollywood no harm and our own industry a power of good."

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