Obama Is Fighting Against Tax Hungry Sports Billionaires

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Sporting events generate huge amounts of income in the USA. In 2014, the NFL alone generated $11 billion in revenue, so you’d think that the owners of these sports teams would have enough money to finance their own stadiums and facilities. Well, think again. The NFL actually receives huge taxpayer subsidies to fund renovations to and construction of football stadiums. Taxpayers have dished out almost $7 billion to fund these stadiums over the last two decades, working out to an average of $262 million for each NFL stadium during this time.

Now there is an argument that the building of these huge sporting venues actually helps the local economy and so justify these subsidies. Well, that argument isn’t the view of most economists, and the evidence proves otherwise. In fact, leading economist Robert A Baade actually argues that these stadiums and their subsidies do more to line the pockets of the sports teams and the professional sporting bodies than they do for the taxpayer, who very kindly fund these ventures. Baade says:

“The public sector is underwriting most of the risk, while most of the benefits that accrue, accrue to the teams.”

James Runzheimer, a lawyer who has battled this sort of thing before calls it like it is:

“It’s part of the corruption of the federal tax system, it’s use of government funds to subsidize activity that the private sector can finance on its own.”

So, in another example of the rich getting richer off the backs of the working class, the NFL owners are legally allowed to use money that could go towards the building of schools and hospitals, or even to fund wage raises for our firemen, police officers and nurses, instead goes straight into the already bloated bank accounts of some of the richest people in the world. If you’re appropriately angry at the moment, then keep reading because there may yet be some hope.

President Obama, a man who recognizes just how wrong this situation is, has taken steps to rectify it. In his 2016 budget proposal, the same proposal that the Republicans are refusing to look at, Obama has announced his intention to put an end to this gross misuse of public money. In the budget, Obama provides the reasons for his proposal:

“The current framework allowing professional sports facilities with significant private business use to qualify for tax-exempt governmental bond financing results in artificial financing structures that are designed to fail the private payments test. Further, these financings may involve issuance of excessive amounts of tax-exempt bonds when localities offer to subsidize new stadiums for competitive purposes to attract or retain sports team franchises. Moreover, the current use of tax-exempt governmental bonds to finance sports facilities has shifted more of the costs and risks from the private owners to local residents and taxpayers in general.”

What the President is proposing makes a lot of sense, and would hopefully put the financial burden for these sports facilities back onto the corporate giants that own them, rather than the people who live and work in the towns and cities they happen to be built in. It’s sickening to think that the residents don’t actually get any benefit from their tax money in this instance. Why bother building the stadiums? Just cut out the middle man and get each resident to mail a check to a local billionaire at the end of every month.

Obama continues:

“The proposal eliminates the private payments test for professional sports facilities. As a result, bonds to finance professional sports facilities would be taxable private activity bonds if more than 10 percent of the facility is used for private business use. By removing the private payment test, tax-exempt governmental bond financing of sports facilities with significant private business use by professional sports teams would be eliminated. The proposal would be effective for bonds issued after December 31, 2016.”

This would be a huge improvement, as most of these stadiums are used primarily for private business enterprises, so it’s only fair that they be self funded, just like any other business premises. Unfortunately if the Republicans get their way this budget will never come to pass, and hard working Americans will still have to donate their time, sweat and money to ensure that the sporting bigwigs of the country don’t have to go without. Because who knows how they would survive without another car, or mansion, or helicopter. You and your tax money are the only things standing between the NFL and a little bit less caviar for their owners at supper time!

 

Featured image via U.S. Herald