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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]

New York Will Probably Make Old People’s Lives Difficult If They Move to a Low-tax State

There’s a state fiscal crisis after all. Plus, old people have all the money.

[H]igh-tax states do not like to lose high-income emigrants, and will check to make sure that former residents really have moved and are not simply pretending that their winter home is their permanent domicile.

“New York is the most aggressive, probably followed by California,” said Bob Meighan of TurboTax. “New York has a long reach and will go after retirees, in particular.”


And one more thing – keep those receipts!

David Moise [of] WeiserMazar[s], said that there are two forces at work there. “More people are leaving because of the disparity in income and estate taxes, and New York is becoming much more aggressive about examining those people because there’s much more of a need for revenue,” he said.

“The state will come in and ask for ‘clear and convincing evidence’ that a person who keeps his New York ties has really moved to Florida, or elsewhere,” he said. At WeiserMazar[s], clients have had to produce phone bills, credit card statements, apartment measurements and EZ pass receipts to prove that they no longer spend most of their time in New York.

Low-tax states attract budget-conscious Americans [Reuters]