Related Posts

You Can Blame the Tax Code for Expensive Baseball Tickets

Since it’s opening day for baseball, there are probably a few of you (non-tax accountants) that are at the ballpark enjoying sun, overpriced beers and, if you’re lucky, some complimentary tickets on behalf of your firm.

If you happen to be shelling out your own hard-earned money however, you’re no doubt aware that price of your tickets continue to go up season after season. Throw in $9 beers and Brother Jimmy’s BBQ and you’ll spend a small grip just to enjoy a day of sport and no work.

What’s the cause of the skyrocketing cost of attending a baseball game, you ask? The tax code of course!


That’s according to an op-ed by two professors, Duke law professor Richard Schmalbeck and Rutgers business professor Jay Soled, in today’s Times.

There are many reasons for the price explosion, but a critical factor has been the ability of businesses to write off tickets as entertainment expenses — essentially a huge, and wholly unnecessary, government subsidy.

These deductions have led to higher ticket prices in two ways. On the demand side, they have fueled competition for scarce seats, with business taxpayers bidding in part with dollars they save through the deductions.

On the supply side, the large number of businesses bidding for expensive seats has driven the expansion of luxury skyboxes and a reduction in overall seats in new ballparks.

The authors note that baseball was, until the 1970s, a “populist sport” and fans of all economic classes could attend games for a reasonable cost. Those days are long gone and the professors blame the ability of corporations to deduct business-entertainment expenses as the culprit. They state that you not need look further than the opening of the new Yankee Stadium that has “3,000 fewer seats than its 1923 predecessor but almost three times as many skybox suites.”

The professors advocate a limit on deductions for on luxury tickets to a low fixed amount (e.g. $50). They cite the outright elimination as “unrealistic” but we can’t recall at time when “realistic” and “Congress” collided in a sentence.

We agree with our esteemed colleague at ATL that if you really want to stick it to the companies who take advantage of tax code’s generous provisions, just make skybox tickets non-deductible altogether.

As the authors note, Corporate America has a love affair with sports-related perks and we’d guess that eliminating the deduction would not stop them from buying luxury tickets. The client relation types in your firms know that there is an intangible value to wooing potential clients in some comfortable confines as opposed to cramped seating in the stands with the commoners.

Throw Out Skybox Tax Subsidies [NYT via ATL]

Form Letters Generated by Pesky Technology Spurred by BS Deadlines Are to Blame for Herman Cain’s Late Taxes: Spokesman

Godfather of tax gimmicks Herman Cain has a bit of tax trouble in his past, reports the Daily Beast. In 2006, while Herm was undergoing treatment for cancer, taxes due to the state of Georgia were not paid in a timely fashion and this resulted in the GOP hopeful being served with a tax lien. It took a couple of years to sort everything which was probably longer than necessary since it sounds like extensions were filed on time but the campaign is using this non-issue to remind everyone that we need to fix this mess that is controlled by computers and deadlines and things that drive the system:

The Republican’s campaign late Tuesday confirmed the lien, portraying the unpaid taxes as an oversight while Cain was undergoing cancer treatment and the state’s lien as an excessive response that shows the need for tax reform.

“The experience serves as an example of how broken our federal and state bureaucracies are with respect to the collection of revenue,” Cain campaign spokesman J.D. Gordon told The Beast. “The entire process is driven by automated letters generated in response to deadlines.”

Right. Because allowing citizens to file taxes whenever it’s convenient, using hand-written letters delivered by carrier pigeon would be a much better way to administer our tax system.

Cain’s Tax Delinquency [TDB]

Last Minute Tax Help Ideas: Advice From Gary Busey

With just over 24 hours until the tax filing deadline, some taxpayers may be getting desperate and many CPAs are too swamped to take any last minute clients. Faced with such a dilemma, some people are freaking out since it’s rumored that any non-compliance with the IRS will inevitably lead to interrogation techniques approved by the Bush Administration. To avoid this, you’ll need someone that is impervious to physical pain, high stress and has a smile that will frighten yet calm the most anxious of procrastinating taxpayers.


To wit: