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Congress Might Snuff Out The Green Bay Packers
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<blockquote data-quote="HardRightEdge" data-source="post: 574651"><p>There is a common misconception about the taxation issue.</p><p></p><p>I've heard some in the media mention the $10 billion in annual NFL revenues and the league's tax exempt status in the same breath, as though the $10 billion is not taxed. That's a wild distortion.</p><p></p><p>While the <em>league</em> enjoys tax exempt status the <em>teams</em> do not. Even the Packers, classified as a not-for-profit organization, are <em>not</em> tax exempt. While the <em>league</em> retains a certain percentage of the revenues to pay Goodell his excessive salary, pay the league office staff, pay the lawyers, pay the refs, fund the pensions, cover the overhead expenses, and whatever else the league puts on it's books, it is a small percentage of the NFL's $10 billion take.</p><p></p><p>There's another way to look at it that might clarify things. Let's say instead of the current arrangement an unwieldy process were established whereby the <em>league</em> maintained a minimal amount of starting operating cash and then billed 1/32 of their ongoing expenses to each team each month. Those billed expenses would be deductible on each team's tax return as business expenses that any other business would declare. The end result is the same.</p><p></p><p>Now, that's not say there are <em>no</em> tax advantages to the current arrangement. If, for example, the league retained excessive revenues then a tax bite to the teams might be deferred. Or, to take just one more example, if the league uses it's untaxed revenues to pay lobbyists there would be an advantage because an individual team could not treat it as a deductible business expense. But on the whole, relative to the loopholes exploited across corporate America, the NFL's arrangement is somewhere between tame and innocuous.</p><p></p><p>Certain Congressmen seem to be seeking press coverage on this issue to placate what must be some popular heat coming from their districts while also conveniently deflecting from the pressing issues of the day that can't seem to be managed.</p><p></p><p>The hedge fund industry enjoys a tax advantage unique in the code, unlike the NFL. They are able to treat fee income as capital gains at the much lower tax rate. The tax revenue that would be generated from taxing just one of the largest hedge funds like everybody else would far exceed what they'd get from the NFL league office.</p><p></p><p>As for paying state or local taxes to fund stadiums, that's a local matter, not a federal tax issue. If one does not like it they need to take it up with their state and local legislatures. Even then, it's not much different than the property tax abatements, cheap leases and other inducements local and stage governments spread around to many and sundry private enterprises. It just so happens a big old stadium is a more conspicuous tax expenditure than the page 3 story about paying some corporation a pile dough to keep a facility in town.</p></blockquote><p></p>
[QUOTE="HardRightEdge, post: 574651"] There is a common misconception about the taxation issue. I've heard some in the media mention the $10 billion in annual NFL revenues and the league's tax exempt status in the same breath, as though the $10 billion is not taxed. That's a wild distortion. While the [I]league[/I] enjoys tax exempt status the [I]teams[/I] do not. Even the Packers, classified as a not-for-profit organization, are [I]not[/I] tax exempt. While the [I]league[/I] retains a certain percentage of the revenues to pay Goodell his excessive salary, pay the league office staff, pay the lawyers, pay the refs, fund the pensions, cover the overhead expenses, and whatever else the league puts on it's books, it is a small percentage of the NFL's $10 billion take. There's another way to look at it that might clarify things. Let's say instead of the current arrangement an unwieldy process were established whereby the [I]league[/I] maintained a minimal amount of starting operating cash and then billed 1/32 of their ongoing expenses to each team each month. Those billed expenses would be deductible on each team's tax return as business expenses that any other business would declare. The end result is the same. Now, that's not say there are [I]no[/I] tax advantages to the current arrangement. If, for example, the league retained excessive revenues then a tax bite to the teams might be deferred. Or, to take just one more example, if the league uses it's untaxed revenues to pay lobbyists there would be an advantage because an individual team could not treat it as a deductible business expense. But on the whole, relative to the loopholes exploited across corporate America, the NFL's arrangement is somewhere between tame and innocuous. Certain Congressmen seem to be seeking press coverage on this issue to placate what must be some popular heat coming from their districts while also conveniently deflecting from the pressing issues of the day that can't seem to be managed. The hedge fund industry enjoys a tax advantage unique in the code, unlike the NFL. They are able to treat fee income as capital gains at the much lower tax rate. The tax revenue that would be generated from taxing just one of the largest hedge funds like everybody else would far exceed what they'd get from the NFL league office. As for paying state or local taxes to fund stadiums, that's a local matter, not a federal tax issue. If one does not like it they need to take it up with their state and local legislatures. Even then, it's not much different than the property tax abatements, cheap leases and other inducements local and stage governments spread around to many and sundry private enterprises. It just so happens a big old stadium is a more conspicuous tax expenditure than the page 3 story about paying some corporation a pile dough to keep a facility in town. [/QUOTE]
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