Even with sympathetic Republicans commanding majorities in the
Louisiana Legislature, Gov. Bobby Jindal still will have to pick up about a
dozen Democrats in the House and at least a couple more in the Senate in order
to get his income tax elimination/sales tax increase swap passed. And here’s
the wedge issue to pick off enough votes: the Saints and soon-to-become
Pelicans have better chances to be better teams with the swap.
By jacking its top income tax rate up to 13.3 percent, California
effectively took an issue simmering in the background for professional athletes
and put it into crisis mode. With its large population and conducive weather,
the state disproportionately attracts athletes at the highest, and therefore
most lucrative, levels of sport to call it home, either because teams are based
there or because they participate in individual sports and they can choose
where to live.
But, in statements the ideological content of which give lie his
nickname, very successful golfer Phil “Lefty” Mickelson noted recently as a result
of the hike he
needed to evaluate whether he should continue to live in California. Fellow
top linkster Eldrick “Tiger” Woods spent three years at Stanford and showed
long ago he was no dummy: he quit the state years ago for income-tax-free
Florida in part because of once-Golden State’s high rate even then.
Team sports athletes aren’t as fortunate in their ability to
self-deport, but in all major professional leagues some concept of free agency
exists, where at a certain point in their careers these professionals may bid
their services to other teams. And when even the typical lowest salary in the
big four leagues (football, baseball, basketball, hockey) starts at a more quarter
million bucks a year and can go 100 times higher, tax consequences become a
major concern in decisions about where to continue their careers (for
example). Even with players starting out – for example, in baseball players
may decide to sign with a major league team or reject that in favor of
attending college with an eye on improving their deal later – whoever they sign
with will have tax consequences.
Athletes based in a state, like all other state-based taxpayers, must
pay state income taxes. But, worse, they also get taxed in many, but not all,
jurisdictions where they play road games. This magnifies the relative value of
lenient tax policy to them, and also reduces burdens of the home state, if it
collects individual income taxes, in that it must create a mechanism to enforce
both home state collection and from nonresident athletes (a brief explanation
of Louisiana’s version is here).
So were Louisiana to rid itself of this tax, this would create a large
tax cut for the 100 athletes and coaches associated with the New Orleans Saints
and New Orleans (for now) Hornets (as well as relatively small ones for members
of the New Orleans Zephyrs minor league teams). It also would abrogate the use
of non-Louisiana athletes as money spigots, but the loss of that revenue stream
also would eliminate the enforcement costs (which can be nontrivial, given the
complexity of the system; for example, the 150 or so coach and player participants
in the Super Bowl in New Orleans this weekend have to pay up basically at least
0.06 percent of their salaries – including playoff earnings – just for being at
the big game).
And this may produce an extra incentive for players to compete for the
two New Orleans franchises. Keep in mind, for example, that quarterback Drew
Brees would save $1.2 million a year right off the top in state income tax
liability, meaning the Saints could have offered him that much less to get the
same deal – money that could then be spread out to pay other players, which can
be critical in the National Football League with its salary cap. Higher net
incomes attract and keep better players, and the Saints and Hornets with the deep-sixing
of the tax suddenly would have in essence six percent more resources to bring to
bear in that quest.
Athletes, like almost everybody else under the Jindal tax swap, would
be paying more in sales taxes when in the state, but that is not likely to be
increased even half of the six percent and usually would represent a much smaller
base. Keep in mind as well that for the most successful athletes, a major
source of income can be endorsements, which face only in-state income taxes. And,
individual athletes, particularly golfers, might be more willing to relocate to
Louisiana and bring with them their spending as a result of crossing out
Louisiana income taxation.
So if you see a legislator who is a true believer in the faith that government
needs progressive income taxation in order to correct the outcomes produced by
the rigged and/or lottery-like free market system, but who also happens to be a
dyed-in-the-wool Saints fan, let him know his support of the tax swap likely
brings to Saints one step closer to a repeat Super Bowl win, if not the
establishment of a football dynasty.
3 comments:
I read where that rascally Treasurer has eaten the Governor's homework again, that is, according to one of the Governor's paid apologist/hitman.
Seems the Governor and his smarter-than-everyone-else minions could not figure out (nor keep up with) the fact that they have spent and have contractually committed to spend more than a BILLION dollars over what is left and available for such spending.
Apparently, according to the Governor's people, IT IS THE TREASURER'S FAULT. HE SHOULD HAVE TOLD US THAT ALL THAT SHRINKING REVENUE WAS A PROBLEM. WE JUST DIDN'T KNOW, AND HE DID NOT TELL US! IT'S ALL HIS FAULT.
WAA! WAAAA! WAAAAAAAA!
[Are there any adults left working for the Governor in Baton Rouge?]
In response to the commenter's query about adults working for the Governor, there sure does not seem to be any on his legal staff.
Most successful baseball team: New York Yankees.
Most Super Bowl titles: Pittsburgh Steelers. Runner-up: San Francisco 49ers.
Best NFL team since 2000: New England Patriots.
Most iconic (and winning) NBA franchises: Los Angeles Lakers and Boston Celtics.
What do these great, winning teams have in common? They play their home games in states that charge considerably higher income taxes than Louisiana. Clearly, the state needs to raise income taxes, not abolish them, if we want the Saints to get back to their winning ways.
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