That term – Sports Tax – is not hyperbolic. In a week that saw Louisiana fork over $5 million to the NFL for the privilege of helping that league make big Super Bowl money, Sports Tax is the most accurate catch-all label for the four sets of levies the public is being made to shell out.
The first Sports Tax comes from the higher taxes we all pay in order to fund direct handouts. Just as NFL owners convinced Louisiana politicians to give them that $5 million taxpayer subsidy, similar collusions between team owners and lawmakers have been forcing taxpayers everywhere to do much the same. In all, Bloomberg Businessweek reports that “taxpayers have committed $18.6 billion since 1992 to subsidies for the NFL’s 32 teams, counting the expense of building stadiums, forgone real estate taxes, land and infrastructure improvements, and interest costs on public bonds.” That’s almost $1 billion every year – and that’s just for football, meaning the figure isn’t even counting similar handouts for other leagues.
The second Sports Tax comes in the form of a rigged tax code, which effectively compels honest taxpayers to bankroll professional teams. As Republican Sen. Tom Coburn detailed in a report last year, the NFL, NHL, PGA (among others) use special provisions in that code “to exempt themselves from federal income taxes on earnings.” The report concluded that because of this, “Taxpayers may be losing at least $91 million subsidizing these tax loopholes for professional sports leagues that generate billions of dollars annually in profits.”
The third Sports Tax is embedded in your cable television bill. Though this levy is not itemized on your bill, the Los Angeles Times reports that up to half of your total cable payment is “for the sports channels packaged into most services.” That’s because the sports stations tend to charge significantly higher rates than other outlets, and yet are automatically included in most basic cable packages, thereby preventing ratepayers from opting out. The result is a tax obligating those who do not watch sports to subsidize those who do.
The final Sports Tax hits you two ways: First when your annual taxes go to support higher education and then when you or your kids pay ever-higher tuition rates. In both situations, your cash is typically subsidizing large schools’ sprawling athletic departments. That’s right – thanks in part to multi-million-dollar coaching salaries, 93 percent of those departments bring in less money than they generate, meaning you are paying a Sports Tax to make up the difference.
So why hasn’t Congress already raised taxes on the rich? Perhaps because the superwealthy have raised a lot more political money than the rest of us.
- Percent of donations to super-PACs this year that come from just 196 Americans: 80
- Amount the Koch brothers and their foundations plan to spend to defeat Obama: $395 million
- Total money raised by John McCain’s 2008 presidential campaign: $384 million
- Number of billionaires who’ve made donations to Mitt Romney’s super-PAC, Restore Our Future: 32
- Percentage of Americans who give more than $10,000 in any election cycle: 0.01
Just to make this clear, so you rub it in your crazy-as-Fox uncle, income tax rates are lower than at any time in 80 years.
The other big fact is the fraction of U.S. national GDP taken by the federal government. Fox’s uncles swear that this is at an all-time high. In fact, the federal share of GDP is at its lowest since 1950.
The corporations that occupy Congress. - David Cay Johnston
For who are the 0.1 percent? Very few of them are Steve Jobs-type innovators; most of them are corporate bigwigs and financial wheeler-dealers. One recent analysis found that 43 percent of the super-elite are executives at nonfinancial companies, 18 percent are in finance and another 12 percent are lawyers or in real estate. And these are not, to put it mildly, professions in which there is a clear relationship between someone’s income and his economic contribution.
Executive pay, which has skyrocketed over the past generation, is famously set by boards of directors appointed by the very people whose pay they determine; poorly performing C.E.O.’s still get lavish paychecks, and even failed and fired executives often receive millions as they go out the door.
Since the legendary investor receives most of his income from capital gains and dividends, Perry’s plan wipes out most of his already-low tax bill. Buffett reported $62,855,038 in income on last year’s tax return while receiving only $600,000 in compensation from Berkshire Hathaway and the Washington Post Co. (where he is a director). If, aside from that $600,000, all of his other income is from capital gains and dividends, Buffett’s effective federal income tax rate under the Perry plan would be a microscopic 0.2 percent. Buffett’s tax bill would be slashed from the $6.9 million he actually paid in 2010 to $120,000. (Even if Buffett had two-thirds of his income in the form of capital gains and dividends, the average for the richest 400 people in the country, he’d get a $2.7 million tax cut and pay a 6.8 percent effective rate.) [read more]
The increasing percentage of government operations paid for by income taxes (paid by better-off earners), and payroll taxes (paid by all employed persons), 1950-2008.
Just in case you were wondering what a flat tax could look like.
Presidential hopeful Herman Cain isn’t just a former CEO of Godfather’s Pizza and head of the National Restaurant Association. He was also once a prolific writer, who up until January 2011 produced a weekly opinion column published by the conservative website WorldNetDaily.
The columns ranged from heavy economic pontification to colorful treatises on topics like why Tiger Woods should run for President in 2016. But a common thread running through much of his writing was a startlingly poor power of foresight – and not just about Woods, whose “character, discipline and leadership” Cain lauded in 2006.
In at least one column, Cain seemed to condemn a proposal that is now a pillar of his highly touted 9-9-9 tax plan. On November 12, 2010, Cain wrote a column about rumors that Democrats would propose a consumption tax called a VAT. “The worst idea is a proposed national sales tax,” Cain wrote. A 9% national sales tax is now one of Cain’s three nines.
The problem, Cain argued in 2010, is that similar national sales taxes have “eventually gone up or expanded” in other countries. This argument echoes current conservative critics of 9-9-9, including Americans For Tax Reform’s Grover Norquist, who claim that enacting a national consumption tax would make the government more vulnerable to revenue-hungry bureaucrats.
At the conclusion of the column, Cain did endorse eviscerating the current tax code and replacing it with a flat tax, which is consistent with what he wants to do now with 9-9-9. “Mr. Cain has been a proponent of the Fair Tax and Flat Tax over the past 15 years,” says Cain campaign spokesman J.D. Gordon, who denies that there’s any contradiction between 9-9-9 and the 2010 column. “To take something out of context in a 600-word commentary, out of over 500 columns published over 15 years, frankly does not make sense.”
Nonetheless, with Cain surging in the polls, his rivals for the Republican nomination may seek to use his past statements against him. And tax policy was not the only area where Cain may have misjudged the future. Throughout 2008, Cain repeatedly wrote that the creeping economic downturn was an invention of the mainstream media.