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Brooks Wilson's Economics Blog: The Jock Tax

Tuesday, May 19, 2009

The Jock Tax

(HT Colin Cowherd, ESPN Radio)  In a previous post, I wrote on the frequently observed tendency of politicians to fund projects in their districts with tax revenues generated from other districts.  A close cousin is the tendency of politicians to impose taxes on taxpayers living outside their districts.  Speed traps and hotel taxes are examples and anger us when we fall victim.  They are taxation without representation.  The jock tax is another example, and in my book, every bit as immoral as a speed trap even though it is paid by rich athletes.  Kevin Baxter explains the history of the tax and its collection ("The taxing life of a pro athlete," Los Angeles Times, April 12, 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...

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.
The jock tax is taxation without representation and unfair.  Voters as taxpayers don't care because athletes are rich.
As salaries have skyrocketed, the so-called "jock tax" has become widespread and controversial. Its imposition has raised questions of fairness and, for tax expert Joseph Henchman, has laid waste to the once-revolutionary prohibition on taxation without representation.

"Politicians are seeking to shift tax burdens to people that don't vote," he says. "It does create a rather disturbing trend because it essentially allows politicians to provide more government services than [citizens] are willing to pay for." ...

"Nothing surprises me that the government does to try to get some money," says Oliver [athlete], who will make $3.665 million this summer. " . . . The common person, they're not going to feel sorry for us. And if I was that person, I would be saying the exact thing. I can see both sides of it."

"No, it's probably not fair," says Ralph Espinosa, a Miami-based CPA who has done tax work for several NFL and major league players. "But they make more money than most of us. Their information is easily accessible online. Most people know their salaries [and] they can go in and see their schedules."
We should stop thinking of the rich as tax targets to pay for government our services.  Certainly, some progressivity in the tax code is justifiable, but past a certain point it is robbery even if legal.  The jock tax is another example of piling on.  We should limit the ability of politicians to impose taxes on people living outside their districts. 


  1. It appears the government will do anything to get more tax money out of the U.S. citizens. Why should I pay a higher tax on a hotel just because I happen to be in your city? If I am in your city I will not only be spending money staying in a hotel but restaurants, venues, shopping, etc. where I will already pay the local tax amount. I should not be over-taxed for visiting and staying overnight in a hotel.

    Although I think our sports figures are paid more than enough, this is capitalism at its best. If they demand higher salaries and are paid that salary, their taxes are already enormous. I do not feel the jocks should be taxed by visiting an opposing team. That makes no sense to me.

    Karen Cox

  2. Jared Wolf28/5/09 8:06 PM

    I am a huge sports fan and was not aware of this. If i were an athlete I would be upset at this, because it just seems like another tax that somehow the government is able to charge for. If they are going to charge sports players a tax for playing out of their city, why not charge them extra for the food they buy, water they use, the air they breathe, because I mean they are rich and can afford it right?