October 30, 2008
WSJ: NFL Teams Rush to Avoid Obama's Tax Increase
Wall Street Journal editorial: Taxing the Dolphins: Another NFL Team Faces Obama's Tax Rush:
Don't think tax rates matter to business decisions? Ask H. Wayne Huizenga, the owner of the Miami Dolphins, who declared earlier this week that he intends to sell up to half his ownership in the NFL franchise before next year. Why? Because as he told a Florida newspaper, Barack Obama "wants to double the capital gains tax, or almost double it. I'd rather give it to charity than to him." ...
Mr. Huizenga also has NFL company. In July, we wrote about the Rooney family's musings about selling part of the Pittsburgh Steelers to avoid the 45% death tax rate. We saw a similar tax effect in 1992 when Bill Clinton raised tax rates.
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I could be cute and argue that this advances transactions which might have occurred later and thus advances payment to the Treas and assists the economic situation by advancing activity which would have otherwise happened later.
Posted by: sheldon s. cohen | Oct 30, 2008 4:59:48 PM
Well, Wayne, go ahead and give it to charity. And by the way, would you mind telling us how much your net worth would be after you sell and pay the higher tax?
Posted by: Sid Finkel | Oct 30, 2008 9:30:57 PM
It doesn't help that Wayne Huizenga is one of the least sympathetic NFL owners. Most Miami fans would be thrilled if Huizenga sold the team to a better owner that could reestablish the franchise's pre-Huizenga winning ways.
Posted by: Tim | Oct 30, 2008 11:49:26 PM
I'm seeing the same thing with my small business clients. One guy moved up his retirement and the selling of his company so that he could avoid Obama's higher capital gains taxes. There's nothing like being forced to make bad economic moves because of bad tax policies of candidates.
Posted by: Woody | Oct 31, 2008 3:02:05 PM
If it's any succor to these guys, the Bush recession has probably significantly knocked down the value of sports franchises. After all, the income stream pretty much relies on advertising revenues from advertisers who target men, auto manufacturers, beer, etc., and who are getting hit hard by the recession. And, the escalating value of sports teams has been driven to a great extent by the availability of easy financing to purchase franchises. I assume that this has dried up as well, slowing what was, after all, a valuation bubble.
Since, thanks to Bush economic policy, the values of their franchises will be declining, they won't really have to worry much about President Obama's tax policies.
Posted by: Stuart Levine | Oct 31, 2008 6:50:21 PM
Woody's client may be quite dumb. Obama is calling for elimination of capital gains taxes on small business transfers.
Posted by: Tim | Oct 31, 2008 8:54:55 PM