The invaluable investigative site ProPublica has been mining its trove of confidential tax documents that were released to it to expose the many ways that the wealthy members of the oligarchy exploit the system to make even more money and avoid paying taxes. I posted recently about how they revealed how wealthy people in the US abuse the Roth IRA provision that was designed to help ordinary people save for their retirement. Their latest report shows what is going on with sports teams.
Wealthy individuals buy sports teams (or a share of them) and it is assumed that they do so at least partly because they like the glamor associated with hobnobbing with elite athletes and hosting dignitaries in their luxury boxes. But those are not the only perks. ProPublica shows that these teams are also a tax dodge that enable owners to pay taxes at a lower rate than even the highest paid athletes.
Take Steve Ballmer, owner of the Los Angeles Clippers and former CEO of Microsoft. For 2018, Ballmer reported making $656 million to the IRS. His federal income tax rate was just 12%. Compare that with Lakers star LeBron James, who reported making way less than Ballmer, $124 million, but whose tax rate was significantly higher than Ballmer’s: 35.9%. Ballmer’s tax rate was lower even than that of Adelaide Avila, a concession stand worker at Staples Center. Her rate was 14.1% — higher than Ballmer’s even though his income was almost 15,000 times greater than hers.
This video explains how this happens.
Once again, we should note that such tax dodges are not a bug in the system, they are a feature. We should never forget that the tax laws in this country are designed by and for the oligarchy.