The movie My Favorite Year (1982) was based on the Sid Caesar variety television show Your Show of Shows (1950-1954)—a live television comedy legacy in New York City continued with Saturday Night Live. The movie character King Kaiser said:
 
“We’re gonna keep doing this sketch. Y’know why? Because it’s funny. And in my business, you never cut funny.”
 
The adage “you never/don’t cut funny” is used in playwriting, television scriptwriting and movie scriptwriting. If there are jokes that make people laugh, the jokes should never be removed from a script; if there are weak points, the script should be tightened around the jokes. The idea behind the saying is much older than the 1982 movie (writer Erica Jong, in the February 2006 citation below, seems to have used it since at least 1973), but the movie formalized the “you never cut funny” adage.

 
TVtropes
Quotes: Rule Of Funny
“We’re gonna keep doing this sketch. Y’know why? Because it’s funny. And in my business, you never cut funny.”
—King Kaiser, My Favorite Year
   
Rotten Tomatoes
My Favorite Year Quotes
King Kaiser: [to Boss Rojeck] We never cut funny!
– Submitted by Peter C (7 months ago)
 
25 September 1992, The Sun (Baltimore, MD), “‘Mr. Saturday Night’ honors show biz both old and new” by Stephen Hunter, pg. 18:
If it’s shapeless, it’s shapeless out of obedience to a higher principle, that old Borscht Belt adage: Never cut funny.
     
USA Today
Posted 2/6/2006 8:35 PM
The truth about books (and us)
By Erica Jong
(...)
I wrote a mock-memoir in Fear of Flying (1973) and added to the tendency — though I did cover my rampant exaggerations by calling the book a novel. It was my critics who claimed it as autobiography, not me. I always copped to the fact that it was full of made-up stuff and that I made stuff up for the sake of laughs. “Don’t cut funny” has been my writing mantra since I started.
 
Hartford (CT) Courant
Last-minute Change
Recasting Means New Focus For ‘30 Rock’
October 11, 2006|By ROGER CATLIN; Courant TV Critic
(...)
“It’s a part that’s going to evolve over the series,” says Fey, whose motto is: “You never cut funny. The more funny people, the better.”
     
Google Books
The Rough Guide to The Hitchhiker’s Guide to the Galaxy
By Marcus O’Dair
London: Rough Guide Ltd.
2009
Pg. ?:
Among Maggs’s recollections are his mantra “never cut Funny” (ie leave in ad-libs if they work) and the excitement among certain female cast members upon the arrival of Christian Slater.
 
Withering Bites
Pride & Prejudice and Adaptation: Less is More
February 3, 2009
noisyhope @ 7:57 pm
(...)
Wright remembers (as many of us seem to forget) that Austen’s second work is a comedy.  And you may cut in the interest of time, but you never cut funny.  Not only do you never cut funny, if you can add funny – you keep it.
   
The Truth According to Mark
Tuesday, April 28, 2009
Is Colbert Funny?
(...)
So what is he? Short answer - he is a political comedian playing a role. Most of his lines are written with the help of a staff of writers and the writers are to the left of the real Colbert. Colbert follows the old rule, don’t cut funny, so left-leaning jokes stay in if they are funny.
   
Scriptmag.com
Author Spotlight: Write It Funny or They’ll Cut It
October 14, 2011 2:19 pm
Jenna Milly
Ever heard this old screenwriting adage: “They don’t cut funny”? It’s one that’s tried and true. And sometimes painful to hear. The “they” are often the last people you want messing with your script — the decision-makers. If they’re suggesting to cut one of your jokes, it probably means it’s not funny.