Wisconsin Gov. Scott Walker is proposing a “jock tax” to help pay off $220 million in government bonds to fund a new basketball arena for the Milwaukee Bucks. The jock tax would treat visiting professionals like National Basketball Association athletes as residents of the taxing jurisdiction, collecting tax on income earned in the state.
The Bucks’ private owners are contributing $150 million toward the cost of replacing their current sports stadium, and former owner and former U.S. Senator Herb Kohl (D-WI) has promised to kick in $100 million. An additional $50 million is expected to be generated from city and county government taxpayer money.
‘Raw End of the Deal’
Brett Healy, president of the Wisconsin-based John K. MacIver Institute for Public Policy, says using public funds for private works such as sports arenas is not a good deal for taxpayers.
“I think, philosophically, any time you ask taxpayers to pay for these sorts of new arena deals, the taxpayers end up getting the raw end of the deal,” Healy said.
“Any time you are talking about a new arena, I think there is risk for the taxpayers,” he continued. “You still come down to the fundamental question: ‘Is it a proper role for government to expend taxpayer money.”
‘A Pure Money Grab’
Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University, called Walker’s jock tax proposal “a pure money grab.”
“From an economic point of view [it] is a bad idea—it’s not acceptable,” she said. “We tax income on a residential basis, and usually you have to have residence for quite a while before a state or locality has the ability to tax you. There is something that is really problematic in doing this.”
While unveiling the proposal on January 27, Walker called the jock tax proposal a “common-sense, fiscally conservative approach.” De Rugy disagrees.
‘Money Losers’ and ‘Money Pits’
“When you look at the economic literature, these arenas are bad investments. They don’t trigger economic growth, they end up costing more for taxpayers, they never deliver on the job promises, and they are expensive,” she said.
“We know that publicly funded sports arenas are money pits. They are not [economically] stimulative, and they are bound to be money losers,” de Rugy added. “So, you are doing something that is extremely questionable, to fund something that is going to be just a money pit and a bad financial investment.”
Kelsey Hackem ([email protected]) writes from Columbus, Ohio.
“The “Jock Tax”: Fair Play or Unsportsmanlike Conduct,” John DiMascio, http://www.heartland.org/policy-documents/jock-tax-fair-play-or-unsportsmanlike-conduct/