Thursday, October 14, 2004
Today's Wall Street Journal has a fasciniating article on how the PGA Tour's lobbyists succeeded convincing Congress to exempt pro golfers from the new tax bill's restirctions on defined contribution plans:
On page 598 of the 650-page bill, at the end of a section designed to limit the use of corporate "deferred compensation" plans, is an exemption for any plan "established or maintained by an organization incorporated on July 2, 1974." In other words -- the PGA Tour Inc., the nonprofit association whose members play on the professional golf circuit....How did the PGA Tour succeed in having golf plutocrats like Tiger Woods excluded from the provisions in the tax bill? The article includes this tantalizing suggestion:
[T]he pension plan -- linked to golfers' performance -- offers a 26-year-old player who began his career in 2001 and plays 17 seasons a retirement nest egg of nearly $43 million even if he ranks No. 75 and never wins a tournament....
The tax bill that Congress sent to President Bush limits the flexibility of deferred-compensation plans to dodge taxes. Among other things, it restricts early withdrawals and withdrawals delayed beyond the date set originally. But the bill exempts the PGA Tour pros.
As the bill moved through Congress in June, a crush of influential lawmakers attended the PGA Tour's Booz-Allen Classic at Avenel Country Club in Maryland, where they played with the pros. Ways and Means aides say the boosters of the PGA Tour exemption included Rep. Jim McCrery, a Louisiana Republican. At the tournament, he played with Australian golfer Adam Scott, according to the Hill newspaper....TaxProf Blog previously noted the boondogle included in the tax bill for professional sports teams. The article closes by noting other pro sports winners and losers:
"I don't know what any of these special breaks have to do with American manufacturing jobs," says Rep. Charles Rangel of New York, the top Democrat on the House Ways and Means panel. "But I do know one thing -- pro golfers and sports-franchise holders won the Washington lobby game, and the American taxpayers have lost."
Congressional sponsors of measures focusing on particular sports often aren't eager to highlight their successes. Democratic Sen. Blanche Lincoln of Arkansas won an amendment exempting foreign gamblers from paying withholding taxes on parimutuel winnings, a boon to the dog tracks of West Memphis and the horse stables of Hot Springs. But there has been little or no word of her triumph in Arkansas media. Owners of Nascar racetracks won a provision that allows them to depreciate grandstands over seven years, instead of 15, but only those built between now and 2008; it doesn't apply to those built earlier, the subject of a long-running dispute.
Not all sports got what they wanted in the tax bill: A provision that would have cut the capital-gains tax on sales of horses, avidly sought by wealthy Kentucky breeders and pushed by Republican Sen. Jim Bunning, failed.