Force For Thee, But Not For Me
So, another one for the “Do As I Say, Not As I Do” file.
On Oct.30, Disney announced its purchase of LucasFilm – one juggernaut swallowing another – for $4.05 billion. Since George Lucas is the sole proprietor of his film empire, which includes rights to the Star Wars and Indiana Jones franchises, he will pocket 100 percent of the Disney windfall. Pre-Disney, Forbes magazine estimated Lucas’ net worth at $3.3 billion – now, as CNBC reports, “the deal will bring his net worth to $5.2 billion after taxes.”
As Marketwatch notes, Lucas has good reasons, beyond avoiding inheritance taxes, to sell now, before he dies:
“By cashing out now, experts say the filmmaker has spared his family the need to pick up the pieces of his empire after he’s gone. It also allows him to focus his remaining years on his charitable endeavors — particularly Edutopia and the George Lucas Educational Foundation, which he founded in 1991.”
But a disturbance in the force suggests another reason for the fortuitous timing of the deal – the expected tax hikes coming in 2013:
“Long-term capital gains tax from the sale of assets held more than one year are taxed at a rate of 15 percent for investors in the 25 percent income-tax bracket or above (Lucas’s level), and zero for investors in the 10 percent or 15 percent bracket. Those rates are set to jump to 20 percent and 10 percent, respectively, in January. ‘He probably wanted to take advantage of the lower rate on long-term capital gain while it’s certain,’ says Bill Smith, managing director at CBIZ MHM, a national accounting and professional services provider.”
In other words, Lucas supports tax-and-spend policies, but he is not above making business decisions to avoid taxes.Sadly, this doesn’t make him unusual among entertainment industry elites (see U2).