Finally, an Obama administration tax proposal I can wholeheartedly endorse. The president’s budget proposes ending tax-free status for municipal bonds whose proceeds are used to build stadiums for professional sports teams. Colin Taylor, writing at occupydemocrats.com, hails the proposal and claims that it has cost taxpayers $4 billion over the past 30 years. This is a dubious number, which presumably assumes that taxable bonds would have been issued for the same purpose, with the government taxing the income of bondholders. Taylor is on more solid ground when he writes that the current arrangement allows “billionaire franchise owners to hold city governments hostage unless their taxpayers and fans shell out millions to build or renovate stadiums on top of the exorbitant prices one must pay for tickets, jerseys and eight dollar Bud lights.”
I think he could have made another argument that should appeal to political left-wingers but which also appeals to me, and that is that many of these new stadiums are built so that owners can increase the number of skyboxes which they rent out at exorbitant rates to businesses and rich people. My brief experiences in skyboxes suggests that the rich people there pay little or no attention to the game and instead compare the hors d’oeuvres there with those in other skyboxes they’ve visited. I much prefer the old-line stadiums (or current minor league stadiums) where people of all backgrounds sit with each other in the stands and, between hot dogs and beers, pay attention to the game. So I would join Colin Taylor if he wanted to make a Jacobin-like proposal to outlaw skyboxes and assess confiscatory tax rates on skybox sales.
Unfortunately, Taylor segues into some childish partisan rhetoric about how Republicans will oppose Obama’s proposal because they favor rich people. The fact is that team owners who are beneficiaries of this tax provision include both Republicans and Democrats, and that they support both Republican and Democratic politicians who take their calls. And most of the municipal authorities and many of the state authorities who connive with them are Democrats. It’s silly to portray this as an issue of virtuous Democrats versus vile Republicans. It’s an issue on which this Democratic president, perhaps prompted by career Office of Management and Budget personnel who are very much aware of the arguments against these tax deductions, is making a proposal which is unlikely to go anywhere in Congress because members of both parties will be prompted to block it. Pat Moynihan opposed these deductions, but even as chairman of the Senate Finance Committee he was unable to end them.
