The Weird World Of Economics

Luxury freebies for Oscars stars.

The US tax man has helped put a stop to the 100,000-dollar goodie bags, but celebrities will still be showered with an eye-popping array of lavish gifts at this year's Oscars.

Luxurious holidays, state-of-the-art electronic gadgets and a lifetime supply of yoga pants are just some of the freebies that will be on offer to stars this week, despite a clampdown by the Internal Revenue Service (IRS).

The Academy of Motion Picture Arts and Sciences announced last August that it would no longer offer its famously elaborate gift baskets crammed with high-end luxury products valued at around 100,000 dollars.

"It seemed a little inappropriate to offer a gesture of thanks that then carried with it a tax obligation," Academy spokeswoman Leslie Unger said when explaining the decision.

But even though the Oscars has put an end to free swag, companies big and small are still queuing up to try to get their products into the hands of a celebrity, which can translate into big bucks.

Lash Fary, the founder and president of Distinctive Assets, a Los Angeles-based entertainment marketing and gifting company, said tighter tax rules had little or no effect for super-rich movie stars.

For the past five years, Fary's company has put together an unofficial "consolation gift basket" which is sent to Oscars nominees the day after the awards show.

This year's edition is valued at 71,000 dollars and is stuffed with dozens of items ranging from a 26,000-dollar all-inclusive trip to Caesar's Palace in Las Vegas to a humble box of sweets.

"Nothing has really changed, except for a little piece of paper that I have to put in the gift basket, stating the fair market value of what is included," Fary told AFP when asked about the tax clampdown.

"We haven't noticed any disruption at all in our business. And there's more interest than ever in getting quote-unquote 'free stuff.' Celebrities accept it as a perk -- a taxable perk, nonetheless.

"For a celebrity, it just becomes another piece of paper for them to give to their tax attorneys. Most of them are fortunate enough to live their lives without having to make decisions based on what the tax consequences are."

Fary's company normally works in partnership with awards show organizers, running gift suites and lounges backstage for events such as the Grammys, where stars can peruse luxury goods at their leisure.

He hit upon the idea of providing unofficial gift baskets to Oscars nominees after deciding that no one deserved to finish Oscars night without something to show for it.

"I'd heard Bette Midler once complaining after the Emmys that she'd gotten dressed up and came away with nothing, so I thought it would be cool to make sure that none of these amazing actors walk away empty-handed," Fary said.

"I believe that it doesn't matter how rich and famous you are, you're still bummed out when you don't win something like an Oscar.

"So we wanted to soften that blow, and we've found that most people are grateful to receive a little distraction the day afterwards.

"Hopefully, with 71,000 dollars' worth of distractions, you're going to be a little bit less bummed out."

What goes into the gift baskets is carefully thought through.

Ten-year-old "Little Miss Sunshine" star Abigail Breslin, for example, will not be given the bottle of Snow Queen Kazakhstan vodka that will be distributed in the adult nominee gift baskets. "We're getting her a selection of amazing teas instead," said Fary.

"We try to find products that are one of two things: either they're super useful, like toothpaste, or they're really amazing, like the Caesar's Palace package," Fary said.

Lorena Bendinskas, co-founder of Silver Spoon Entertainment Marketing, said her company steers clear of large-scale luxury items, preferring to offer services such as beauty and spa treatments instead.

"We are unofficial -- we're more into treatments, services and creating a party atmosphere at our events," said Bendinskas.

Silver Spoon is currently hosting a two-day Oscars Penthouse at the famous Regent Beverly Wilshire Hotel, where stars can drop by to pick out casual wear or indulge in a spot of pampering.

Bendinskas is unimpressed by the IRS's moves to clamp down on the gift-giving.

"I've never had to declare a birthday present, so I find it a little silly," she told AFP. "If it's something of great value, you expect to pay tax on it. But if it's a present...

"It's kind of no-win situation for celebrities. If you see everything they have to deal with on an everyday basis, as we do, with the paparazzi and stuff, they are constantly getting hated on.

"This is just a thanks for making great movies. These are the people who help put a smile on our faces -- so why not give them something to smile about? Give them a break," she said.

Copyright © 2007 Agence France Presse.

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