July 14, 2009

Game Misconduct: St. Louis Widens Jock Tax

This op-ed was published in the Boston Herald on July 14, 2009.

As the 80th anniversary of the All-Star Game comes to Busch Stadium, the city of St. Louis has publicly rolled out the red carpet and privately sent each All Star a special tax bill.

The city always charges a “jock tax” of 1 percent on the daily income of visiting athletes, and that’s on top of almost 6 percent that the state of Missouri collects. It is hard to sympathize with a tax on millionaire ballplayers, but this tax also targets any employee who travels with the team. Even these non-jocks—scouts, trainers or other support staff lugging the ballplayers’ equipment around—have to pay the jock tax.

Fourteen of the 17 states with a pro baseball team levy a jock tax, and Massachusetts is among them. Visiting players to Boston have to pay the state income tax on their daily earnings, but the tax rate is lower than Missouri’s, and Boston has no city wage tax.

Jock taxes are not new, but St. Louis has added a new twist. As Jake Wagman of the St. Louis Post-Dispatch has reported, the city is not following the state’s lead in how to calculate the tax owed during All-Star weekend. Instead of lumping the players’ bonuses in with their salaries and demanding a share of daily earnings, the city is demanding 1 percent of the entire bonus, implying all of the bonus is earned during All-Star weekend.

Even if a player is chosen but does not go to St. Louis, or if he’s benched the whole game, he will still owe St. Louis 1 percent of his bonus.

Shouldn’t the city apply the same principles to every All Star? Should President Barack Obama, who will throw the first pitch, and Sheryl Crow, who will sing, be treated similarly—a portion of their income taken as well? Are the tax collectors really going to enforce a rock ‘n roll tax and a Barack tax?

All-Star bonuses are modest by Major League Baseball standards. Some of the players’ contracts don’t include an All-Star bonus, and for those lucky enough to have one, the average amount is only $50,000. That means the tax revenue St. Louis collects will be roughly $500 apiece and total about $20,000.

Compared to revenues from concessions, parking or even taxes on the tickets themselves, this additional revenue is a pittance. It would not even be enough to pay the salary of the tax collector who thought it up!

Our own Red Sox All Stars will have to pony up for the privilege of playing in St. Louis. Kevin Youkilis earns a $50,000 All-Star bonus, so he’ll shell out an extra $500 for no good reason. Jonathan Papelbon receives a $25,000 All-Star bonus, so he’ll pay $250 of that to St. Louis.

The point is not whether the players can afford the extra $250 or $500. It is whether St. Louis has pushed its tax collection too far with this grab for a minor purse.

Kiran Sheffrin is a Sox fan and athlete studying economics and global relations at Wesleyan University. She is interning at the Tax Foundation in Washington, D.C.