by Goldy, 11/30/2006, 12:35 PM

Sonics owner Clay Bennett claims he’s serious about building a new suburban arena for the team. Personally, I don’t believe him. His recent announcements are most likely intended to provide cover when he finally picks up and moves the team to Oklahoma City.

But if the state Legislature does decide to give him everything he wants (you know, a free, $300 million arena where he keeps all the revenue, state and local government picks up all the tabs for repairs, and he can still leave before the bonds are paid off,) I’ve got a suggestion on how to fund it: an income tax on the salaries earned by visiting athletes during their “duty days” in the state.

No… really.

At least twenty other states already levy just such a “jock tax”… a tax our own Sonics, Mariners and Seahawks players already pay on nearly every away game. So why shouldn’t we tax opposing players too?

It won’t cost WA residents anything, and in fact, it won’t cost most of the visiting players all that much either, as any tax they pay here can be deducted from their state and federal income taxes, and they’re already hiring accountants to file tax returns in a dozen or more states. And they’re millionaires. Put a high exemption on the tax so as not to burden low-paid athletes in low-profile sports, but make the A-Rods pay their due. They can afford it.

As it is we don’t seem to have an ethical problem taxing visiting tourists for car rentals and hotel rooms to pay off the bonds at Safeco and Qwest fields, so why shouldn’t we be taxing the people who benefit most from these public projects, the athletes whose multimillion dollar contracts are subsidized by the super luxury boxes Bennett covets?

As for the constitutional issues, well that’s just a bonus as far as I see it. We get to test that bogus 1933 decision without the prospect of throwing the state into financial chaos should it inexplicably be upheld. And with that red herring out of the way, we can finally debate tax restructuring purely on the merits, without the constitutional question being used as a sledgehammer or an excuse.

I’m absolutely serious. You want the Sonics to stay in the region, but you don’t want to raise local taxes to pay the ransom? Tax visiting athletes. What could be so controversial about that?

25 Responses to “How to pay for a new Sonics arena? A jock tax”

1. sgmmac spews:

Your tax sounds good but will never happen and it’s doubtful that it’s constitutional either. The states that tax our athletes are applying their state income tax fairly on all who earn income in their state.

Now, if Washington ever decided to get rid of their regressive tax system that punishes the poor and the middle class, and come up with a state income tax, it would fair!

2. Libertarian spews:

Is it big deal if all the professional sports teams in Seattle moved to other states? It wouldn’t matter to me if the Sonics, Mariners, Seahawks and whatever else left for other places.

If this guy Bennett wants a new stadium for the Sonics, then he should finance the deal. The taxpayers shouldn’t be picking up the tab for private industry, be it a sports team of a huge areospace company.

sgmmac,

I’ll stick with no income tax in Washington, thanks very much. I’d rather not have another government agency sticking their nose into my personal business.

3. rhp6033 spews:

Speaking of A-Rod, how about drafting the tax so it covers only “former residents” of the state who earn their money as professional athletes when they return to the state? You could call it a “return on investment” tax, considering how many Mariners (in particular) spend their developing years here, only to be lured elsewhere by big money once they are eligible for free agency.

Of course, you have to define “residents” carefully, as many pro athletes pick states of residence for financial reasons, even if they work half the year elsewhere.

Personally, I generally don’t like taxes which are targeted to non-residents. Its a little to close to “taxation without representation”, and reminds me of speed traps in some areas of the country. But since so many other states are imposing the tax, isn’t it a bit like trying to play with one arm tied behind our back, if they get part of our player’s salaries to use to improve their own team’s facilities (directly or indirectly), and we don’t?

I guess that instead of calling it an “income tax”, you could call it a “public facility tax” upon those who benefit from the facilities, even if they don’t live here. From that perspective, since they are generally non-taxpayers in a state which used tax dollars to support a sports facility as a public building, then its a bit more like a “non-resident tuition” charge at a public school.

4. sgmmac spews:

Taxing former residents is called a source tax and congress eliminated them years ago, because they are grossly unfair too. California were experts at tracking down anyone who ever worked in their state and slamming a big tax on their retirement checks, claiming that part of the retirment was earned in their state.

A public facility tax works as long as all who use the public facility pay the tax……..

I personally like a Seattle only latte tax……….

5. Libertarian spews:

I personally like a Seattle only latte tax……….

-sgmmac

=======

Now that one may work perfectly! Heck, we could probably pay off the national debt with a Seattle latte tax!

6. righton spews:

why not add any high paid occupations?

Visiting Venture capitalists
Investment bankers..
some Lawyers…

Seems more fair to “just say no” to socialized sports..

7. ArtFart spews:

6 This is starting to be reminiscent of the states that tried to tax the incomes of crew members of overflying aircraft.

Bottom line here is that the people have expressed quite clearly that if professional sports can’t pay their own way, fuck ‘em…they can sponge off the taxpayers in some other place.

8. Steve spews:

You are surely not serious, whether or not you know it. Other states can and do tax income by non-residents that is earned with those states, as part of a state income tax. We have no income tax and any effort to tax income only of non-residents would be plainly unconstitutional, since states cannot discriminate against residents of other states. The only way you can do it is to have a superficially non-discriminatory tax, such as our hotel tax.

9. Roger Rabbit spews:

You should’ve been a lawyer, Goldy. Maybe it’s still not too late … by the time you graduate from law school you’ll still have 20 good years left.

10. Roger Rabbit spews:

A good tax lawyer can overthrow empires.

11. Roger Rabbit spews:

8

Now here is an example of a little knowledge leading to a lot of ignorance. Steve, are you a lawyer? No, I didn’t think so. Do you know anything about Commerce Clause jurisprudence? … just as I thought. I hate to break it to you, but this tax would NOT be a discriminatory restraint on interstate commerce. If you wish to argue otherwise, please cite cases in support of your view.

12. Roger Rabbit spews:

What Steve @8 is trying to tell us is that the Commerce Clause says states with an income tax can tax the income of visiting athletes, but states without an income tax can’t tax the income of visiting athletes because it would be a discriminatory restraint on commerce. I’d like to see the legal reasoning behind that one! Not to mention case law … ha ha ha.

13. Roger Rabbit spews:

Wouldn’t it be nice if the leg enacted such a tax and the courts struck it down because we DON’T HAVE AN INCOME TAX? We would be one of only 4 or 5 states that couldn’t tax the income of visiting athletes to pay for public sports facilities. Instead, our already over-taxed working class would have to pony up sales taxes for these facilities, while zillionaire athletes who are taxed by nearly every other state get a free ride here. Talk about obscene tax-burden shifting!

Why do I say that would be “nice”? Because it’s the surest way to pass a state income tax in Washington that I can think of! Such a travesty would really open Washington residents’ eyes to just how obscenely unfair our antiquated Rube Goldberg state tax system is! When you starting taxing Joe Sixpack to give tax relief to the players down on the field, a state income tax will pass faster than Tim Eyman can say “$30 car tabs!”

14. Wells spews:

Excellent idea. So, why is a new stadium necessary, anyway? I don’t believe it. Sounds to me like corporate jocks want to flex their political muscles, strut their boody down the corporate runway. The stadium is a terrific landmark and architectural masterpiece. So, it’s a little small, big deal! Or is the real problem it has too few corporate suites. Yeah, I think that’s it. Me thinks the elites don’t like to mix with the underclass while they watch their niggers jump. (Yes, no offense intended, I said the N word. What are ya gonna do about it?)

15. Steve spews:

It seems to me a rather obvious proposition that a state’s imposition of a tax on non-residents with respect to an activity engaged in within the state by both residents and non-residents is discriminatory and there are numerous Supreme Court and other cases throwing such taxes out, usually despite a better disguise than Goldy’s proposal. Since the Constitution was enacted, this hasn’t been allowed; indeed, discrimination in commerce was one of the defects of the Articles of Confederation that the Constitution was intended to overcome. However, to provide one authority, the Supreme Court threw out part of the Washington B and O tax in 1987 because it imposed a greater burden on out-of-state in Tyler Pipe Ind. v. Wash. Dept. of Rev., 432 US 232 (1987). Here are a few excerpts:

We conclude that Washington’s multiple activities exemption discriminates against interstate commerce as did the tax struck down by the Washington Supreme Court in 1948 and the West Virginia tax that we invalidated in Armco. The current B & O tax exposes manufacturing or selling activity outside the State to a multiple burden from which only the activity of manufacturing in-state and selling in-state is exempt.

In explaining why the tax was discriminatory on its face, we expressly endorsed the reasoning of Justice Goldberg’s dissenting opinion in General Motors Corp. v. Washington, 377 U.S., at 459, 84 S.Ct., at 1577. We explained:

“The tax provides that two companies selling tangible property at wholesale in West Virginia will be treated differently depending on whether the taxpayer conducts manufacturing in the State or out of it. Thus, if the property was manufactured in the State, no tax on the sale is imposed. If the property was manufactured out of the State and imported for sale, a tax of 0.27% is imposed on the sale price. See General Motors Corp. v. Washington, 377 U.S. 436, 459 [84 S.Ct. 1564, 1577, 12 L.Ed.2d 430] (1964) (Goldberg, J., dissenting) (similar provision in Washington, ‘on its face, discriminated against interstate wholesale sales to Washington purchasers for it exempted**2817 the intrastate sales of locally made products while taxing the competing sales of interstate sellers’); Columbia Steel Co. v. State, 30 Wash.2d 658, 664, 192 P.2d 976, 979 (1948) (invalidating Washington tax).” 467 U.S., at 642, 104 S.Ct., at 2622.

[I]n Williams v. Vermont, 472 U.S. 14, 105 S.Ct. 2465, 86 L.Ed.2d 11 (1985), [we] invalidated the State’s residency restriction on the availability of a sales tax credit for use tax paid to another State.

16. Goldy spews:

Steve @15,

Well, you know, Steve… sure, if you say so. Let’s not creatively address and debate our tax structure because something might or might not be unconstitutional. No, let’s sit with the unfair and inadequate system we have now, because at least we know it won’t be thrown out by the courts.

Same sort of argument the other side used to dismiss the Property Tax Homestead Exemption and quell debate. Might be unconstitutional. Then again, might not, but why risk it huh? Nope… better stick with the status quo.

(Oh… and you know, it is possible to amend the state constitution, but shhhh… better not talk about it.)

17. ArtFart spews:

14 Wells, methinks ya hit the nail on the head. The bigwigs don’t like the Key Arena because it doesn’t give them the opportunity to make their lofty VIP boxes….well, lofty enough. There probably isn’t enough room around the Seattle Center to park the Lambos and limos either, without the public ponying up for some new el gigantismo parking garage. Gotta compensate for the Gates Foundation building their new headquarters on top of what’s now the “po’ folks parking” over on the other side of 5th Ave North.

So what do you get when you take a mediocre, mismanaged team out of an old half-full arena and put them in some crystal palace somewhere else? A mediocre, mismanaged team in a new quarter-full arena.

18. Wells spews:

It still bugs me that even Goldy didn’t give my monorail proposal the time of day. The Circulator Monorail. Oh, some know-it-all from Portland designed it, came up and showed it around, low-impact, low-cost, single-track and 10-12 simpler stations around Seattle Center, Downtown, Capital and First Hills. Yeah, it still bugs me. Nevermind. The Circulator Monorail, a marvel blacklisted. Screw you Seattle bitches.

19. Roger Rabbit spews:

15 That case is fact-specific.

20. David Wright spews:

Goldy @ 16:

It sure looks to me like Steve was debating a creative tax proposal. It also looks like he has identified a potentially serious problem with it, and has even been nice enough to do some free legal research for you.

You don’t seem to be looking for intelligent debate; you seem to be looking for adulation.

21. rob spews:

Goldy, you are a true liberal. You self admitted that you blog for free and have to struggle to pay your mortgage but you are quick to tax someone else. I guess that is so you can continue to blog for free and struggle to support your family? Ever consider getting a JOB?

22. righton spews:

goldy, if you had been here you might also be pissed at the prior sonics giveaway. virgina anderson and other seattle insiders (liberals all) puckered up and gave $$ away.

i think lots of us, libs and normal folks :) are pissed at all the stadium giveaways…

sinc you all make up rules as you go along, we end up w/ variable funding and tax rules..

23. Steve spews:

Goldy @ 16 — Well, I’m sorry that we have a federal system here with one nation rather than many individual countries like we had under the Articles of Confederation. You obviously can’t “amend the state constitution” to change the one adopted in 1787, but who cares? Are we one country or not? Why not repeal the Civil War, the Bill of Rights, most of the Constitution and most of our history? Why shouldn’t California have been allowed to tax Okies’ immigration or work or whatever to keep them out? Are you completely lacking in any sense of history or what?

24. Particle Man spews:

If the team moves to Issaquah Highlands onto Microsoft land not being used by them but already mitigated and 500 yards from I-90, Issaquah will not have the tax base needed to offset costs. This likely gives the Bellevue sites an upper hand.
As for the taxing of out of state pro players 45 or 46 states do this and they all have income taxes. We could do this as a B&O tax as almost all pro players are corporations and thus can be taxed where they do business. But this would not generate enough money by itself.

25. Particle Man spews:

One other point regarding a B&O tax on out of state pro players is that this idea has been in the works for years in Olympia and the primary reason why it has not moved forward is that enough legislators cannot agree on how to spend it. The best idea is to use this money as dedicated State Parks funding. At any rate, it looks like the other sports teams owners might like the idea less if all the money goes to one sport. So I am betting on this revinue going for some nutral thing like Parks or little league fields.