Tuesday, October 12, 2004
Press reports about winners and losers in the new tax bill passed last night:
• Tax Bill Worth Millions to Pro Teams Is Approved (New York Times):
A lot of pro sports owners woke up richer today, at least on paper. A number of investment bankers and accountants say many professional sports franchises will gain tens of millions of dollars in value because of approval yesterday by the United States Senate of a sprawling tax bill focused on multinational corporations and farmers.
The change to an obscure tax rule affecting pro sports owners was contained in a single sentence in the 633-page bill, which was approved last week by the House of Representatives. The measure allows owners to write off the full value of their franchises over 15 years; under current tax law, they can write off only the value of players' contracts over three to five years.
The change might give a $2 billion windfall to pro sports owners, as bankers estimated it would add about 5 percent to the value of professional franchises, which was estimated at $41 billion over all by Forbes magazine in 2002. The actual effect will vary from team to team.
• Payback on K Street (The Washington Post):
The corporate tax bill that Congress has sent to the White House rewards just about every special interest that retains a lobbyist in Washington....The Motion Picture Association of America, Hollywood's trade group, had been hoping for $350 million a year in subsidies, which were written into the Senate version of the bill as partial compensation for the loss of a bigger export subsidy that the bill repeals. But the Senate's largesse was cut back to around $100 million in the final bill that emerged from the House-Senate conference, leaving the movie industry as the biggest net loser from the legislation. ( [For prior TaxProf Blog coverage, see here.]