Spain Shoots For Better Tax Policy

November 9, 2009

Spain has been able to at least temporarily avoid a strike in their professional soccer league, La Liga. The dispute is not between owners and players, but rather between the owners and the government. From the NY Times:

The tax break was introduced in 2004 to lure top-notch foreign expertise, but it has mostly benefited football clubs, to the point it was dubbed the “Beckham law” after David Beckham, the British soccer star who was among the first to profit from the measure when he signed for Real Madrid.

Now the Spanish government, faced with a soaring deficit in 2010 forecasted at 8.1 percent, needs all the cash it can get. Local media have dubbed the planned tax increase the “Ronaldo law” after Cristiano Ronaldo, the Portuguese player who signed for Real Madrid for a salary of around €13 million annually.

Spain has been giving foreigner player a major reduction in their income tax liability. However with large budget deficits forcasted, Spain is forced to decide whether tax breaks targeted primarily at celebrities are worth the cost. The US is not immune to such celebrity targeted policy. Maybe some states in the US could learn a lesson from the Spanish playbook.


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