The World According to Oatney

The Sporting Back Door

State Representative Stacey Campfield shares information about a new tax in Phil Bredesen's budget:

A graduated income tax on some athletes is a planned part of the new budget. The $2,500.00 tax goes on some professional athletes and entertainers that make over $50K a year, but not others. Affected are the NBA Grizzlies and the NHL Predators competition. Exempt are everyone else. I do not support this camel's nose under the tent but I find it interesting that the one pro team that Bredesen gave the farm to to get them to come to Tennessee (The Titans) get a complete pass.

To clarify, if your professional team is the one visiting Tennessee, your players, coaches, club officials, and staff will be the ones to pay this tax (Titans' opponents exempted).

A new bill sponsored by Tennessee State Rep. G.A. Hardaway of Memphis would impose a privilege tax of up to $2,500 on professional basketball and hockey players when their teams play in Tennessee.

Under House Bill 0019, Tennessee would tax athletes and entertainers performing in the state who make more than $50,000 a year.

It has long been an accepted fact that Representative Hardaway isn't the brightest bulb in the Capitol Hill firmament, but this legislation simply proves how completely clueless the poor man actually is. This bill is literally begging the Predators and Grizzlies to leave the State. No owner in his or her right mind is going to subject their players to paying an unnecessary tax. NHL and NBA owners would likely bring the issue up in owners' meetings at the behest of their respective players' unions, who (you can rest assured) won't put up with it, and will ultimately give the Predators and Grizzlies owners one option-"get out of Tennessee and move somewhere that our players won't have to pay a tax levied only on them for coming to town and doing what they are contracted to do." Lots of States with income taxes impose luxury taxes which are aimed primarily at athletes who visit, but which lots of other folks have to pay-so no one is legally singled out. However, this bill clearly singles out a specific class of out-of-State visitors, and may be unconstitutional.

If this bill is passed and the Grizzlies and Predators do leave within a few short years (I would estimate 3-5 years, considering how bureaucracy works in the NBA and NHL), Hardaway and Bredesen will bear direct responsibility for the jobs lost and drop in the local tax base of both Memphis and Nashville as a result. Since Hardaway is from Memphis, one would think that he would know what the loss of the Grizzlies would mean to the local economy there and that he simply would not want to risk that possibility, especially in this time of the economic doldrums.

The other issue which rears its ugly head here is that of the income tax itself. Twice before in this decade, the income tax in Tennessee was put to rest as a result of popular outrage, most recently being this very year when State Senator Reginald Tate's bill was quickly removed so that it would do no damage to the Democrats (Tate still ran a bill that would tax out-of-State employees). If the Hardaway bill passes, however, it is an income tax on out-of-State residents, and if the Legislature believes they can get by with levying such a tax, they will be poised in a couple of years to try a State income tax again-because they will argue that a form of one is already on the books.

This is a terrible bill, and not merely because I disagree with it, but because its impact was obviously either ignored or poorly thought-out.

Labels: Democrats, Duh, Sports, Tennessee politics

posted by Deacon David Oatney @ 12:19 PM