Hollywood's Crossroads: The Voight-Paul Proposal and Its Investment Implications

The U.S. film industry faces a pivotal moment. In early 2025, actor Jon Voight and producer Steven Paul submitted a sweeping proposal to President Donald Trump to revitalize domestic film production. Their plan, framed as a "Make Hollywood Great Again" initiative, combines tax incentives, infrastructure subsidies, and controversial tariffs to counter declining U.S. dominance in global filmmaking. Yet, its success hinges on navigating legal, economic, and political minefields. For investors, this proposal opens intriguing opportunities—and risks—in a sector already reeling from pandemic disruptions and runaway production.

The Decline of U.S. Film Production

The data paints a stark picture. According to FilmLA, production in Los Angeles—a Hollywood cornerstone—dropped 22.4% in early 2025 compared to pre-pandemic levels. States like Georgia and tax-friendly nations like Canada and the U.K. have lured productions with aggressive incentives, eroding California’s share of the industry. The Voight-Paul proposal seeks to reverse this trend by creating a federal framework to compete with these rivals.

The Proposal’s Pillars

1. Federal Tax Incentives: The plan advocates for tax breaks to offset costs for domestic productions, mirroring programs in Georgia (which offers uncapped incentives) and Louisiana (a 25-40% credit).
2. Infrastructure Subsidies: Funding for theater owners and post-production facilities to modernize U.S. infrastructure, which has lagged behind global rivals.
3. Co-Production Treaties: Diplomatic agreements to collaborate with foreign nations while prioritizing U.S. labor and resources.
4. Limited Tariffs: A conditional tax on foreign films "in certain circumstances," though specifics remain vague.

The White House’s sudden announcement of a 100% tariff on all foreign films—later walked back—highlighted the proposal’s political risks.

Market Impact: Winners and Losers

The tariff proposal sent shockwaves through Hollywood stocks. Netflix shares fell 3.5% in intraday trading after Trump’s announcement, reflecting investor skepticism about punitive measures. Conversely, companies tied to domestic production, such as theater chains (AMC, Cinemark), could benefit from subsidies.

• Tax Credit Beneficiaries: States like California, which proposed a $750M annual tax credit, may see production rebound if federal incentives align.
• Post-Production Firms: Companies like Deluxe Entertainment and Technicolor, which rely on U.S. facilities, could gain from infrastructure subsidies.
• International Studios: Foreign film producers might face headwinds if tariffs materialize, though legal challenges loom.

Risks: Legal and Logistical Challenges

The tariff’s viability is questionable. Films are classified as services under trade law, not goods, making a 100% tax legally contentious. The administration’s "national security" rationale—a stretch even by Trump’s standards—faces lawsuits from studios and unions.

Moreover, enforcement would prove complex. A film like Mission: Impossible – The Final Reckoning, shot across the U.S., France, and Norway, would defy simple categorization. Industry experts warn tariffs could backfire, stifling creativity and driving studios toward opaque co-production structures to avoid taxes.

Investment Strategy: Focus on Incentives, Not Tariffs

The smarter bet lies in policies that attract—not alienate—producers. Tax incentives, if structured correctly, could stabilize domestic production without market disruption. Investors should track:
- State-Level Programs: California’s $750M credit proposal vs. Georgia’s uncapped system.
- Union Agreements: IATSE’s push for better wages and working conditions, which align with Voight’s job-training focus.
- Streaming Giants: Netflix and Amazon’s reliance on international co-productions may limit their exposure to tariffs but favor tax-friendly environments.

Conclusion: A Fragile Path to Revival

The Voight-Paul proposal offers a blueprint for U.S. film dominance—but only if tariffs are abandoned in favor of carrots over sticks. Tax incentives and infrastructure spending could boost domestic production by 15–20% over five years, according to industry estimates. However, legal hurdles and political volatility remain. Investors should prioritize firms positioned to benefit from federal/state partnerships, like post-production studios and theaters, while avoiding companies overly reliant on foreign markets.

As Hollywood’s golden age pivots between nostalgia and reinvention, the real story lies not in tariffs but in policies that make the U.S. the most attractive—and efficient—place to make movies.

The data is clear: when incentives rise, so do jobs. The path forward is neither simple nor certain—but it is investable.