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Why You Can Kinda Blame President Trump and His Tax Cuts for Your Favorite NFL Team Sucking

More than 30 years ago, President Trump tried to sabotage the NFL. Now you could say he’s indirectly sabotaging your favorite NFL team’s chances of making the playoffs.

But before we explain why, first a little background on why Trump hates the NFL.

In 1986, the NFL was sued by its biggest competitor, the United States Football League, which alleged that the NFL was a monopoly. The USFL team owners had voted to move their season from the spring to the fall in order to compete with the NFL, despite many of the three-year-old league’s teams struggling financially. But the USFL couldn’t get a national television contract from the three major TV networks at the time, and it blamed the NFL, which did have deals with CBS, NBC, and ABC. So the USFL filed an antitrust lawsuit against the NFL. Leading that charge was the owner of the USFL’s New Jersey Generals: Donald Trump.

Trump really wanted to own an NFL team, so he thought the best way to do that was to sue the NFL, and he predicted that the NFL would lose the lawsuit, have to pay the USFL hundreds of millions if not billions of dollars in damages, and would then offer to merge in the USFL’s teams. Then he’d be the owner of the NFL’s New Jersey Generals.

He was right about one thing: the NFL did lose the antitrust lawsuit. But the jury concluded that the USFL’s financial struggles were of its own doing, so instead of being awarded millions of dollars in damages, the USFL was awarded $1. Well, actually $3 because in antitrust cases, damages are tripled.

Trump’s dream of owning an NFL team died, and so did the USFL. Since then, Trump tried unsuccessfully to buy the New England Patriots in 1988 and the Buffalo Bills in 2014. But truth be told, the NFL wanted no part of Trump as a team owner.

So, Trump has gotten revenge on the NFL … sort of. And it has to do with the Tax Cuts and Jobs Act he signed into law late last year.

According to Bloomberg:

The 2017 law could put teams in states with high personal income tax rates at a disadvantage when negotiating with free agents thanks to new limits on deductions, including for state and local taxes, according to tax economist Matthias Petutschnig of the Vienna University of Economics and Business.

Petutschnig’s research into team performance over more than two decades shows that National Football League franchises based in high-tax states lost more games on average during the regular season compared to teams in low or no-tax states. That’s because of the NFL’s salary cap for teams, according to Petutschnig; if they have to give certain players more money to compensate for higher taxes, it reduces how much they pay other players and lowers the team’s overall talent level.

“The new tax law exacerbates my findings and makes it harder for high-tax teams to put together a high-quality roster,” Petutschnig said.

According to his research, which examined NFL regular seasons from 1994 to 2016, the three teams in high-tax California—Oakland Raiders, San Francisco 49ers, and San Diego Chargers (the Los Angeles Rams were still in St. Louis)—won three fewer games on average than teams like the Miami Dolphins and the Dallas Cowboys, which play in states (Florida and Texas) where no state income taxes are levied. A player on those teams “was always going to come out a whole lot better than somebody playing in New York,” Jerome Glickman, a director at Friedman LLP who works with professional athletes, told Bloomberg. “Now, it’s worse.”

Why? Because the TCJA set a $10,000 annual cap for the amount of state and local taxes that taxpayers can deduct on their federal tax returns, which is pocket change for star NFL players who live in states with high property taxes, like New York, New Jersey, and California. That SALT provision is set to expire in 2025.

NFL agent Joe Linta told Bloomberg that a free agent considering a California team compared to a team in Texas or Florida would need to make 10% to 12% more to compensate for his state tax bill. He added that the SALT cap is “a factor” in negotiations.

House Republicans recently passed legislation that would make the $10,000 limit on SALT deductions permanent, but the bill is expected to die in the Senate.

In addition, the TCJA eliminated the popular deduction for unreimbursed employee business expenses, which means football players are no longer allowed to write off union dues and fees for agents, public relations, business management, or off-season trainers, according to Bloomberg.

Joseph Criscuolo, a managing associate at accounting firm Drucker & Scaccetti who works with professional athletes, said that under the tax law, athletes “in the mid-range are going to break even,” with the law’s individual federal income rate cut compensating for lost deductions. But for the highest-paid athletes, the canning of deductions for unreimbursed expenses “is a big deal,” he said.

Under the old law, athletes could deduct those expenses if they exceeded 2 percent of their adjusted gross income.

So Raider Nation, don’t just point fingers at Jon Gruden for your team’s 1-5 start to the season, and for not re-signing star outside linebacker Khalil Mack; you should also kinda/sorta point fingers at President Trump and his tax overhaul, too.