Patrick Hruby at SportsOnEarth.com has an extensive rundown of all the ways taxpayers subsidize sports:
Adding insult to financial injury, federal lawmakers once tried to close this loophole -- and being federal lawmakers, they instead made the problem worse. The Tax Reform Act of 1986 required municipal bonds to become taxable if more than 10 percent of the debt for a facility built mainly for non-government use (read: stadiums) was to be repaid with revenue from a private business. The idea? Cities that were using rent, game ticket surcharges and other sports-related fees to repay stadium bonds would stop gaming the tax code, because really, no municipality in its right and responsible mind would shift 90 percent of stadium debt onto the general public. The unintended outcome? Municipalities started doing just that.
"What happened is that state and local governments started structuring [stadium] deals so that most of the debt service was paid out of general government revenues," says Dennis Zimmerman, a retired Congressional Research Service economist who analyzed the act's effects. "They stopped having user charges and ticket taxes, and had to find general taxes that could apply to everything."
Another fine reason that the tax exemption for municipal bonds is a good place for federal tax reformers to start.
Thanks to reader-participant-community member-watchdog-content co-creator J. for sending the tip.
by Editor | Dec 12, 2012 at 4:34 pm
Related Topics: Government Spending, Taxes
receive the latest by email: subscribe to the free futureofcapitalism.com mailing list