Coach's Corner: Let's tax 95 percent of pro athletes' salaries
Posted Dec 21 2012 6:56am
President Obama. Congress. Pay attention: Raise taxes? Reform entitlements? I've got a solution to the "Fiscal Cliff" problem. You might ask what my credentials are. What is my credibility? The Old Coach did have a semester or two of economics in college when he was a business major before getting his undergraduate degree in physical education and social studies, followed by a master's in education. Forget all that formal learning stuff. I matriculated at the school of Common Sense. Stop right there, Coach! This is a sports column and you're stepping over the line into politics. That's verboten (see reference to last week's foreign language comment). Ah, but wait until you hear my plan for putting a dent into our growing national debt. Professional sports could significantly help solve the problem. First, tax all the salaries of every pro athlete at 95 percent of every dollar over the minimum wage for their sport. Call it an Entertainer Tax. After all, pro sports are part of the entertainment industry. They are paid performers, the same as actors/actresses, singers, TV talking heads, etc. Hundreds of them make way more than they need to live a luxurious lifestyle for just excelling in a sport. That's nice, but it's not a critical part of our economy. It's not essential for the financial health of the U.S.A. If we are going to limit how much bank executives and corporate CEOs can make, let's include entertainers in that group. So let's take a look at how much money we could generate with such a plan. The Old Coach will just use several of the top yearly salaries for the NBA, NFL, MLB, and several top earners in boxing, tennis, and golf to give you a rough idea of the revenues that could be generated. A good website to go to for more specific earnings is forbes.com. You will likely be shocked. My figures are ballpark, not precise, mainly because I hate doing the details. Boxer Floyd Mayweather earned $85 million last year. With my entertainer tax code in place, the government could claim somewhere over $75 million from the gladiator. He would still wind up with a post-tax amount of $10 million to scrimp by on. Not bad for a guy who's main avocation is being able to bloody another boxer's face. No education required. Other yearly top earners from individual sports include Tiger Woods (golf, $59 million), and Roger Federer (tennis, $52 million). Race car drivers are up in that bracket also but earnings are offset by the price of gas. I think we can conservatively estimate that the individual contribution from these athletes could buy a few fighter jets, a couple thousand Homeland Security agents, or a party or two over at the White House. The team sports are where the real revenues would come from, though. Think about some of these figures. The top five player salaries in the National Basketball Association are each more than $20 million, with Lebron James heading the list at a cool $53 million. Apparently, Kobe Bryant is only half as good, as he only makes $29 million. The range of minimum salary for NBA players for this year goes from $473,000 for a rookie to $1.3 million for a 10-year veteran. By my crudest figuring, King James would pay at least around $50 mil in taxes and still have a couple of mil to play with each year. The taxes on the top five players alone would bring in over $100 million. Major League Baseball players' minimum salaries are around a half-million dollars. The average salary is $3 million. There are 25 players on the roster of the 30 teams for a total of 750 (not including another 15 per team that are on the active roster). MLB players could help reduce the federal debt by about $18 billion. Alex Rodriguez would still be trying to keep his head above water with only $1.4 million to spend each year. Maybe he could buy a different bat to improve his slugging percentage. The National Football League has the most players (1,696) of any of the other pro sports leagues, but its average salary is the least at $1.9 million. The minimum salary ranges from $390,000 for a rookie to $925,000 for a 10-year veteran. That's a $16 billion pickup for Uncle Sam. The National Hockey League players could produce about another $13 billion each year. Let's not just stop with the athletes. The same tax table could be applied to movie stars like Tom Cruise who will earn about $75 million this year. He would get to keep $3.75 million to keep up appearances. Of course, as is the case with many of the superstar entertainers, that probably wouldn't be enough to pay for their divorces. I don't realistically think my plan will ever catch on because entertainers have too many fans (some in high places, if you know what I mean) and are overly worshipped by the general public. The upside of The Coach's Corner Tax Code is that it can be a start in the right direction for reducing our national debt. The downside is that our superstars would have less money to spend in nightclubs, on bail money, and on lawyers. And the Old Coach will certainly step up to the bar and do his part by offering to pay the government 95 percent of every dollar that I make that is over the average income for Frederick County teachers. Of course, with my retirement income, I doubt that I will need to worry.