Read Online When to Rob a Bank: ...And 131 More Warped Suggestions and Well-Intended Rants by Steven D. Levitt, Stephen J. Dubner - Free Book Online Page A
Authors: Steven D. Levitt, Stephen J. Dubner
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not going to let you hear it.”
Youch. Regrets, Ms. Siberry. Seems like we have a lousy track record with pop singers—anybody remember when Levitt announced that Thomas Dolby was releasing a new record , an announcement that turned out to be 100 percent wrong?
I guess we should give up pop singers and stick to crack dealers, real-estate agents, and poker cheats.
How Much Tax Are Athletes Willing to Pay?
(SJD)
The Laffer curve is a unicorn-y concept that seeks to explain the rate of taxation at which revenues will fall because earners either move away or decide to earn less (or cheat more, I guess).
If I were a tax scholar interested in this concept, I would be taking a good, hard look at the current behavior of top-tier professional athletes. Boxing is particularly interesting because it allows a participant to choose where he performs. If you are a pro golfer or tennis player, you might be inclined to skip a particular event because of a tax situation, but you generally need to play where the event is happening. A top-ranked boxer, meanwhile, can fight where he gets the best deal.
Which is why it’s interesting to read that Manny Pacquiao will probably never fight in New York—primarily, says promoter Bob Arum, because of the taxes he’d have to pay. From the Wall Street Journal :
Manny Pacquiao has won fights in California, Tennessee, Texas and Nevada, not to mention Japan and his native Philippines. But with Pacquiao in New York this week to promote his next fight—a November bout in Macau against Brandon Rios—Pacquiao’s team said Barclays Center and the Garden were two venues where he wouldn’t fight because he would haveto pay the state’s tax rate in addition to federal taxes. “He’d have to be a lunatic,” said Bob Arum, Pacquiao’s promoter.
In an L.A. Times article , Arum says that Pacquiao may never fight anywhere in the U.S. again:
“By fighting outside the country, as he’s doing in this Rios fight, Manny doesn’t have to pay U.S. taxes anymore—at a rate of 40% for a foreign athlete.
“If this pay-per-view and other things take off like we think they may, I can’t imagine Pacquiao will ever again fight in the U.S.”
There are of course other factors at play besides taxes—gambling, for one, which is a big reason that Macau has become such a boxing center . But whatever you think of the Laffer curve, it’s hard to ignore the variance in tax rates around the world, especially for athletes who might earn a lot of money in a short time.
In January, the golfer Phil Mickelson said he was “ going to have to make some drastic changes ” to deal with federal and California tax hikes (he lives in California). “If you add up all the Federal and you look at the disability and the unemployment and the Social Security and the state, my tax rate’s 62, 63 percent,” he said.
His accounting was challenged and Mickelson, one of the most popular golfers ever, was widely spanked for publicly airing his tax dissent. So last month, when he won back-to-backtournaments in Scotland (the Scottish Open and the Open Championship), he kept quiet. But the media did the speaking for him. In Forbes, Kurt Badenhausen wrote a (very good) article about Mickelson’s British tax tab, estimating that he’d pay, in total, about 61 percent tax on his nearly $2.2 million in earnings. And Badenhausen identifies this interesting wrinkle:
But that’s not all. The U.K. will tax a portion of his endorsement income for the two weeks he was in Scotland. It will also tax any bonuses he receives for winning these tournaments as well as a portion of the ranking bonuses he will receive at the end of the year, all at 45% . . .
The U.K. is one of few countries that collects taxes on endorsement income for non-resident athletes that compete in Britain (the U.S. also does). The rule has kept track star Usain Bolt from competing in Great Britain since 2009, outside of the 2012 Summer Olympics when the tax was
Youch. Regrets, Ms. Siberry. Seems like we have a lousy track record with pop singers—anybody remember when Levitt announced that Thomas Dolby was releasing a new record , an announcement that turned out to be 100 percent wrong?
I guess we should give up pop singers and stick to crack dealers, real-estate agents, and poker cheats.
How Much Tax Are Athletes Willing to Pay?
(SJD)
The Laffer curve is a unicorn-y concept that seeks to explain the rate of taxation at which revenues will fall because earners either move away or decide to earn less (or cheat more, I guess).
If I were a tax scholar interested in this concept, I would be taking a good, hard look at the current behavior of top-tier professional athletes. Boxing is particularly interesting because it allows a participant to choose where he performs. If you are a pro golfer or tennis player, you might be inclined to skip a particular event because of a tax situation, but you generally need to play where the event is happening. A top-ranked boxer, meanwhile, can fight where he gets the best deal.
Which is why it’s interesting to read that Manny Pacquiao will probably never fight in New York—primarily, says promoter Bob Arum, because of the taxes he’d have to pay. From the Wall Street Journal :
Manny Pacquiao has won fights in California, Tennessee, Texas and Nevada, not to mention Japan and his native Philippines. But with Pacquiao in New York this week to promote his next fight—a November bout in Macau against Brandon Rios—Pacquiao’s team said Barclays Center and the Garden were two venues where he wouldn’t fight because he would haveto pay the state’s tax rate in addition to federal taxes. “He’d have to be a lunatic,” said Bob Arum, Pacquiao’s promoter.
In an L.A. Times article , Arum says that Pacquiao may never fight anywhere in the U.S. again:
“By fighting outside the country, as he’s doing in this Rios fight, Manny doesn’t have to pay U.S. taxes anymore—at a rate of 40% for a foreign athlete.
“If this pay-per-view and other things take off like we think they may, I can’t imagine Pacquiao will ever again fight in the U.S.”
There are of course other factors at play besides taxes—gambling, for one, which is a big reason that Macau has become such a boxing center . But whatever you think of the Laffer curve, it’s hard to ignore the variance in tax rates around the world, especially for athletes who might earn a lot of money in a short time.
In January, the golfer Phil Mickelson said he was “ going to have to make some drastic changes ” to deal with federal and California tax hikes (he lives in California). “If you add up all the Federal and you look at the disability and the unemployment and the Social Security and the state, my tax rate’s 62, 63 percent,” he said.
His accounting was challenged and Mickelson, one of the most popular golfers ever, was widely spanked for publicly airing his tax dissent. So last month, when he won back-to-backtournaments in Scotland (the Scottish Open and the Open Championship), he kept quiet. But the media did the speaking for him. In Forbes, Kurt Badenhausen wrote a (very good) article about Mickelson’s British tax tab, estimating that he’d pay, in total, about 61 percent tax on his nearly $2.2 million in earnings. And Badenhausen identifies this interesting wrinkle:
But that’s not all. The U.K. will tax a portion of his endorsement income for the two weeks he was in Scotland. It will also tax any bonuses he receives for winning these tournaments as well as a portion of the ranking bonuses he will receive at the end of the year, all at 45% . . .
The U.K. is one of few countries that collects taxes on endorsement income for non-resident athletes that compete in Britain (the U.S. also does). The rule has kept track star Usain Bolt from competing in Great Britain since 2009, outside of the 2012 Summer Olympics when the tax was
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