Friday, May 20, 2011

I see no good reason to not have Kobe Bryant pay for the building of a new Sonics arena.

Washington State Representative Mark Hope (R-Lake Stevens) and David Frockt (D-Seattle) are hoping to form a Task Force this summer to develop a plan for funding sports arenas and stadiums.

“I think it’s an economic issue,” said Rep. Mike Hope, R- Lake Stevens. He believes the state should be involved in building an arena to lure a franchise back. He also believes it can be done without using Washington taxpayer money.
That’s why he and State Rep. David Frockt, D-Seattle plan to lead a task force this summer to come up with a solution.
“It’s time to revisit the issue,” said Frockt, who also acknowledges there is “no appetite for a public subsidy." Frockt believes the state needs to look at all the financing options on the table.
Hope suggests the state pursue a “Jock Tax” on visiting athletes to partially pay for a new NBA-ready building. It’s a type of tax already in place in several states.
“Right now, you have the Seattle Mariners, Seattle Seahawks going to California to play games, going to Cleveland, Ohio to play games and Cleveland is getting money from our players,” said Hope.
Chris Daniels, Could 'Jock Tax' help bring Sonics back?, KING5 News

This really isn't a new idea, the last time this idea appeared was last year when it was included in a dozen amendments Washington State Senator Rodney Tom sandbagged House Bill HB 2912 with (David Frocht, I sent a link to this amendment to you a few days ago).
2912-S.E2 AMS TOM CARL 101

2ESHB 2912 - S AMD TO  S AMD (S-5336.1) 316
By Senator Tom
    On page 13, after line 28, insert the following:
"NEW SECTION. Sec. 1.  A new section is added to chapter 82.04 RCW to read as follows:
    (1) A rate of tax under this chapter equal to ten percent is imposed on the gross income of a professional athlete derived from Washington sources.
    (2) "Professional athlete" means:
    (a) a resident or nonresident athlete who renders labor or services to a professional athletic team that plays ina sports facility financed with ten percent or more public funds; and
    (b) A resident or nonresident athlete who has a gross annual income that is ten times the first-year base salary of a public school teacher in Washington state."
    Renumber the sections consecutively and correct any internal references accordingly.
2ESHB 2912 - S AMD TO  S AMD (S-5336.1) 316
By Senator Tom
    In the title after "36.100.020;" insert "and adding a new section;"
           EFFECT: Applies a 10% B&O tax on professional athletes.
HB 2912, Amendment 316

10% looks a little high, and it is until you consider that Seahawks, Sounders, and Mariners pay California State Income Tax on the wages earned during that game, when they play there. Most of those athletes are in the 11% tax bracket. Still, the point isn't to tax professional athletes just for the fun of it, it's purpose is to fund sports facilities.

A story written in the LA Times back in 2009 does an excellent job of describing the situation, application, and examples.
If opening day is the best day of the year for professional athletes, then April 15 -- tax day -- is probably the worst. Especially now that 20 of the 24 states with franchises in at least one of the four major pro leagues -- the NFL, NBA, NHL and Major League Baseball -- have laws that require visiting athletes to pay state income tax for each game they play there.

Considering that top-level athletes in football, basketball, hockey and baseball now make an annual average salary of $2.9 million, that means big bucks for states such as California. Home to 15 major professional teams, the state raked in $102 million in taxes from visiting athletes in 2006-07, the last year for which records are available.
. . .
Athletes are taxed based on "duty days" they spend in each state. In baseball, there are approximately 181 "duty days," meaning a player earning $1.81 million would make $10,000 each duty day. Therefore, if that player's team had three games in California, he would be responsible for taxes on $30,000 of income.
. . .
At that point, all the tax collectors have left is a math problem to figure out that Ichiro Suzuki, the highest-paid baseball player in Washington, a tax-free state, will have to pay more than $218,000 in California taxes for the 25 games the Mariners will play there this summer.[2009]
. . .
The advent of the jock tax is commonly traced to the 1991 NBA Finals in which the Chicago Bulls beat the Lakers, then received tax bills from California for the three games played in Los Angeles. However, nonresident tax laws have been on the books in the state since the 1950s. . . .
When the Seahawks played the Steelers in the title game three years ago in Detroit, Seattle quarterback Matt Hasselbeck reportedly had to pay about $10,000 in taxes to Michigan, a state with which he has no ties. If that game had been played in Florida, as two of the last three Super Bowls were, he could have kept the money.

The taxing life of a pro athlete: It's one of life's certainties: Athletes have to pay for income earned on the road., Kevin Baxter, LA Times (2009)
Please, read the entire story.

Understand this, our professional athletes are paying taxes in other states. As I write this, the Seattle Mariners are just about to start playing a game against the San Diego Padres, in California, and pay income tax. When the A's, Padres, Angels play in Seattle they do not pay an income tax, B&O tax.

I see no good reason to not have Kobe Bryant pay for the building of a new Sonics arena.

The only question I have is how much?