Last year was a busy one for public giveaways to the National Football League. In Virginia, Republican Governor Bob McDonnell, who styles himself as a budget-slashing conservative crusader, took $4 million from taxpayers’ pockets and handed the money to the Washington Redskins, for the team to upgrade a workout facility. Hoping to avoid scrutiny, McDonnell approved the gift while the state legislature was out of session. The Redskins’ owner, Dan Snyder, has a net worth estimated by Forbes at $1 billion. But even billionaires like to receive expensive gifts.
Taxpayers in Hamilton County, Ohio, which includes Cincinnati, were hit with a bill for $26 million in debt service for the stadiums where the NFL’s Bengals and Major League Baseball’s Reds play, plus another $7 million to cover the direct operating costs for the Bengals’ field. Pro-sports subsidies exceeded the $23.6 million that the county cut from health-and-human-services spending in the current two-year budget (and represent a sizable chunk of the $119 million cut from Hamilton County schools). Press materials distributed by the Bengals declare that the team gives back about $1 million annually to Ohio community groups. Sound generous? That’s about 4 percent of the public subsidy the Bengals receive annually from Ohio taxpayers.
In Minnesota, the Vikings wanted a new stadium, and were vaguely threatening to decamp to another state if they didn’t get it. The Minnesota legislature, facing a $1.1 billion budget deficit, extracted $506 million from taxpayers as a gift to the team, covering roughly half the cost of the new facility. Some legislators argued that the Vikings should reveal their finances: privately held, the team is not required to disclose operating data, despite the public subsidies it receives. In the end, the Minnesota legislature folded, giving away public money without the Vikings’ disclosing information in return. The team’s principal owner, Zygmunt Wilf, had a 2011 net worth estimated at $322 million; with the new stadium deal, the Vikings’ value rose about $200 million, by Forbes’s estimate, further enriching Wilf and his family. They will make a token annual payment of $13 million to use the stadium, keeping the lion’s share of all NFL ticket, concession, parking, and, most important, television revenues.
After approving the $506 million handout, Minnesota Governor Mark Dayton said, “I’m not one to defend the economics of professional sports … Any deal you make in that world doesn’t make sense from the way the rest of us look at it.” Even by the standards of political pandering, Dayton’s irresponsibility was breathtaking.
In California, the City of Santa Clara broke ground on a $1.3 billion stadium for the 49ers. Officially, the deal includes $116 million in public funding, with private capital making up the rest. At least, that’s the way the deal was announced. A new government entity, the Santa Clara Stadium Authority, is borrowing $950 million, largely from a consortium led by Goldman Sachs, to provide the majority of the “private” financing. Who are the board members of the Santa Clara Stadium Authority? The members of the Santa Clara City Council. In effect, the city of Santa Clara is providing most of the “private” funding. Should something go wrong, taxpayers will likely take the hit.
The 49ers will pay Santa Clara $24.5 million annually in rent for four decades, which makes the deal, from the team’s standpoint, a 40-year loan amortized at less than 1 percent interest. At the time of the agreement, 30-year Treasury bonds were selling for 3 percent, meaning the Santa Clara contract values the NFL as a better risk than the United States government.
Although most of the capital for the new stadium is being underwritten by the public, most football revenue generated within the facility will be pocketed by Denise DeBartolo York, whose net worth is estimated at $1.1 billion, and members of her family. York took control of the team in 2000 from her brother, Edward DeBartolo Jr., after he pleaded guilty to concealing an extortion plot by a former governor of Louisiana. Brother and sister inherited their money from their father, Edward DeBartolo Sr., a shopping-mall developer who became one of the nation’s richest men before his death in 1994. A generation ago, the DeBartolos made their money the old-fashioned way, by hard work in the free market. Today, the family’s wealth rests on political influence and California tax subsidies. Nearly all NFL franchises are family-owned, converting public subsidies and tax favors into high living for a modern-day feudal elite.
Read more. [Image: Matt Lehman]
[Image: Henry Blodget]
Meet the new Romney tax plan, same as the old Romney tax plan. It’s a massive tax cut for the rich, a small tax cut for the middle class, and a tax hike for the poor. That adds up to mega-deficits. How mega? Well, the Tax Policy Center calculates Romney’s $25,000 cap would raise about $1.3 trillion over a decade — against almost $5 trillion in tax cuts over that period. And remember, that’s a $3.7 trillion hole relative to a world with the Bush tax cuts. It’s an almost $8 trillion dollar hole compared to a world with Bill Clinton-level taxes.
Read more. [Image: Reuters]
[Image: Ritchie King]
Mitt Romney is worried that half of make the wealth and half of us take the wealth. So is his running mate Paul Ryan. If this sounds like something out of a dystopian novel, that’s because it is. The world we live in is far different from the world Ayn Rand imagined. Just take a look at total taxes.
The chart above, from the Citizens for Tax Justice, looks at how much households earn and how much they pay in all taxes. In other words, it compares what percent of overall income they make and what percent of overall taxes the government takes from them. It’s not exactly a picture of moochers waging war on heroic entrepreneurs.
Read more. [Image: Citizens for Tax Justice]
Mitt Romney isn’t a big fan of the 47 percent of people who pay no federal income tax. But there’s a small problem. Romney himself might have been a member of the 47 percent as recently as 2009. […]
As Joshua Green of Businesweek has speculated, it’s possible that Romney suffered big enough losses during the 2008 market crash that he zeroed out his 2009 federal income tax liability. Of course, Romney has claimed that he never paid less than a 13 percent effective federal rate the last decade … but he refuses to release any tax returns from before 2010. That’s not to say that Romney is necessarily lying, just that we have no way to check. Consider that six of the top 400 tax filers — a group making nearly ten times as much as Romney — paid nothing in federal income taxes in 2009. It’s certainly plausible that Romney was a member of the 47 percent in 2009.
Read more. [Image: Reuters]
[Image: Derek Thompson]
[Image: Tax Foundation]