Sunday, March 28, 2010

Your Bizarre Tax of the Day

If there are two things most Americans love, they're a) sports and b) whining about taxes. So fuck it, why not combine the two?
Brian Rafalski of the Detroit Red Wings was pretty vocal this week about a so-called 'privilege tax' in effect in the State of Tennessee. Essentially, it forces visiting players from teams such as the Wings to pay $2,500 when their teams play the Nashville Predators.

As Dirk Hoag of On the Forecheck pointed out when the tax was put into place last year, it effects opponents of the Preds and the NBA's Memphis Grizzlies, but not those who play the NFL's Tennessee Titans, despite the fact that football players generally make more money then their hockey and basketball counterparts.

It applies to both teams - the Preds and Grizzlies and their opponents - and can be assessed for up to three games, or $7500 a head total.

Highly-paid players like Rafalski probably aren't hit badly by it, nor are superstars like LeBron James in the NBA - but what of fourth-liners and benchwarmers making the league minimums in the NBA and NHL? Or what about temporary minor-league callups to the Preds and Grizzlies, or other called-up players that just happen to be with their pro teams when they go to Tennessee? Turns out they actually have to pay to go to work that day.

Oh, and why do the Titans and their 8 home opponents not have to deal with the tax? According to SB Nation, the NFL would have punished Tennessee had they taxed Titans players. Translated - the NFL has enough power to where it can say to Tennessee something along the lines of "if you implement this tax we'll fuck you up" and have that threat be credible. The NHL and NBA are apparently less powerful, and thus their franchises* are now subject to a tax. Somewhere, Mancur Olson is laughing his ass off.

Minor-league baseballers are also exempt - good thing, too, because asking someone who plays for the AA West Tennessee Diamond Jaxx at $25000 a year to pay $7500 on top of normal income taxes just because they had the misfortune to be drafted by the Mariners would be a disaster.

So why's the tax there? Beats the shit outta me. Tennessee's official website about the tax is here - I couldn't find a justification for it at all.

Yeah, it's tough to cry for NHL and NBA players getting paid a "piddling" $500000 a year. Just remember - pro sports aren't the only thing on which an asinine "privilege tax" can be assessed.

*I say that the franchises are assessed this tax because now, in order to keep players, the Preds and Grizzlies are going to have to shell out an extra $7500 per player just to compete on an even playing field with players on teams who play in a different division.


Miguel said...

I couldn't find a justification for it at all.

The only justification is Tennessee appears desperate for money and is preying on people who are very hard to defend politically. Who's going to be standing up for whiny rich sports stars (which is how opponents of the tax will be framed as defending).

It's the same rationale as "vice" taxes. Not many people are going to come to the defense of smokers or alcoholics.

In this day and age they will tax whatever they think they can get away with.

Anonymous said...

NC has a tax on out-of-state independent contractors (think performing artists, entertainers, and the like) - 4% when they make $1500 or more in a given calendar year.

Jeff said...

Jamie - no wonder Rob and Heather don't play here very often...

Ben said...

For the record, although I am less reflexively anti-tax than your average American, I still find this tax to be incredibly stupid.