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Taxing Sports

6/16/2005

There is a discrepancy that bugs me about sports:

  • Sports teams require public subsidies for their stadiums.

  • Sports teams have tickets regular people can't afford.

  • Sports teams pay several times more than the market will bear for their employees. (Don't tell me that Kevin Garnett would stay home rather than make $3 million per.)

We the people pour a lot of our money into teams through our purchases and our taxes. What if we didn't pour quite so much?I'm no economist, but let's just say every city in America were to retroactively halve their stadium subsidies. In the short term, it would be tough times for teams. In the long term, I bet the biggest difference would be somewhat lower player salaries, somewhat lower profits for owners, and an increased need for some kind of revenue sharing to support those small market teams. In other words, it might not affect us fans at all.

Plus, the league in general would have more fans (especially the enthusiastic young ones), warmer and fuzzier feelings from the community and local governments, and the more natural relations between players and fans that come from being in more similar tax brackets.

I'm not one of those guys who doesn't see the public benefit of stadiums. Hell, I'm a sports fan. I just don't think that the companies who go the the taxpayers with their hats in their hands should be same ones whose employees have cars with more TVs than the average American home.

I'm a utopian, though. It'll never happen because it would have to be a coordinated national effort. At the moment, cities use the subsidies to steal teams from each other. Cities in general would have to say that they weren't going to pay much for stadiums. That's the deal killer.

Norman R. Augustine is the former chairman and chief executive of the Lockheed Martin Corporation. He says there's another way for the public to get some of that sports star funny money back: by taxing celebrity sports stars the same way executives are taxed. That would mean be a big federal tax increase on these ultra-highly paid employees:

Wouldn't there be some rough justice to the public getting something back from the likes of Jason Giambi and Barry Bonds (both at the center of baseball's steroid storms) with contracts of $120 million for seven years and $90 million for five years, respectively? Or Latrell Sprewell (who choked his basketball coach) at $62 million for five years, or Kobe Bryant (who had rape charges against him dropped) with his new contract at $136 million for seven years?

In the rest of his editorial in The New York Times today he outlines how we should spend that money. His spending ideas sound good to me, and make two things clear: I'm not the only utopian, and there's a tax-and-spend liberal in the heart of that old capitalist Mr. Augustine.