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Subject: "LeBron James' 2018 federal tax rate was triple that of Steve Ballmer:" Previous topic | Next topic
ThaTruth
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Thu Jul-08-21 04:44 PM

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"LeBron James' 2018 federal tax rate was triple that of Steve Ballmer:"


          

LeBron James' 2018 federal tax rate was triple that of Los Angeles Clippers' billionaire owner
https://sports.yahoo.com/report-le-bron-james-2018-federal-tax-rate-was-triple-that-of-los-angeles-clippers-billionaire-owner-165320954.html

Nick Bromberg
Thu, July 8, 2021, 11:53 AM·5 min read


LeBron James had a vastly higher tax rate than Los Angeles Clippers owner Steve Ballmer.

According to an investigation released Thursday by ProPublica, James' tax rate on his 2018 income was nearly triple that of Ballmer’s despite making 19% of what Ballmer made that same year.

James reported $124 million in income three years ago and paid a federal tax rate of 35.9%. Ballmer, the former Microsoft CEO, told the IRS that he made $656 million. He paid $78 million in federal taxes, a rate of 12%.

James, meanwhile, paid over $44 million in taxes on reported income that was $532 million less than Ballmer's reported income.

How did Ballmer get away with paying far less in taxes relative to James? An accounting trick that many other professional sports team owners use. From ProPublica:

Ballmer pays such a low rate, in part, because of a provision of the U.S. tax code. When someone buys a business, they’re often able to deduct almost the entire sale price against their income during the ensuing years. That allows them to pay less in taxes. The underlying logic is that the purchase price was composed of assets — buildings, equipment, patents and more — that degrade over time and should be counted as expenses.

Owning a major professional sports franchise in the United States is an incredibly lucrative business. Franchise values have skyrocketed in recent years. If you want to own a team in the major four sports leagues, you need to have billions, not millions.


The Clippers are one of the most lucrative franchises in sports, too. The team is in a major market and has been successful since Ballmer bought the team in 2014 for what was a record price of $2 billion. Ballmer has been able to decrease his tax rate because of that high purchase price and the fact that the Clippers have reported operating losses.

But IRS records obtained by ProPublica show the Clippers have reported $700 million in losses for tax purposes . Not only does Ballmer not have to pay tax on any real-world Clippers profits, he can use the tax write-off to offset his other income.

How franchise owners use amortization
The ProPublica report is a fascinating look at how team owners can use their franchises to pay less than they otherwise would in taxes. The outlet said it reviewed "dozens" of tax returns of team owners and revealed that owners across all sports are paying less in taxes relative to athletes.

That tax cut is because of a standard accounting practice of amortization and a 2004 tax cut by then-President George W. Bush. The 2004 tax cut allowed pro sports team owners to vastly expand the scope of what they could and couldn't write off on their tax returns. Someone who purchases a team — or an asset — is able to write off a whole host of things involved with the operations of the team. That includes player contracts.

Team owners have been free to legally write off much more than they had in the past. And that leads to lower tax rates. According to the report, Ballmer saved approximately $140 million on his taxes in that five-year span that the Clippers reported $700 million in operating losses.

Carolina Panthers also report losses
The Carolina Panthers are the most recent NFL team to change hands. David Tepper bought the team in 2018 and paid over $2.2 billion for the team.

In the final years of original owner Jerry Richardson's tenure, the Panthers reported operating profits because the amortization period was up. Now that the franchise changed hands, Tepper can take advantage of the ability to amortize his purchase price and report losses even as NFL revenue continues to grow.

The team swung from a large taxable profit before its sale to a tax loss of about $115 million, according to a ProPublica analysis of IRS records, after Tepper’s purchase in 2018. There’s no evidence anything significant about the Panthers’ real-world revenue and expenses changed between 2017 and 2018. The only major difference is the team changed hands, and Tepper now gets a tax benefit through his new entity, Tepper Sports Holdings.

Tepper’s hedge fund is a massive producer of capital gains income — in the past decade, he has often reported more than $1 billion in annual income — so the tax losses produced by the Panthers are extremely valuable to him. A spokesman for Tepper didn’t respond to questions.

Public opinion strongly favors taxing rich at higher rates
To put Ballmer’s 2018 tax rate into perspective, the current marginal tax rate for people making between $9,876 and $40,125 is 12%. Those who make more than $40,125 have every dollar above that up to $85,525 taxed at 22%. There’s a pretty good chance that you, the reader, paid a significantly higher federal tax rate in 2018 than Ballmer did.

That’s a big reason why public opinion favors closing tax loopholes similar to the ones that Ballmer and other professional team owners use to pay less in taxes. According to an April Yahoo News/YouGov survey, 65% of Americans want loopholes closed that allow corporations to put their money in offshore banks while 15% want to keep those loopholes. And 51 percent want the corporate tax raised for proposed infrastructure improvements.

While those two questions don’t directly address what professional sports team owners are doing to lower their taxes, it makes it very likely that a majority of Americans aren’t too keen on how billionaires are saving money via their sports franchises. Even if the practice is perfectly legal.

________________________________________
"Stay out the dark, cause if I catch you when the sun is down..."
https://youtu.be/eaaTxVRG06c?t=89

  

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Topic Outline
Subject Author Message Date ID
If I was paying 12% in taxes with his income, I'd geek out at games too
Jul 08th 2021
1
right, grabbing thighs and everything lol
Jul 08th 2021
2
there's levels to this shit
Jul 08th 2021
3
Smarten up Bron
Jul 08th 2021
4
Why is this the take?
Jul 10th 2021
11
      well, he is already the GM.. lol
Jul 10th 2021
12
'The Whiteness Of Wealth' Probes Why Black Americans Pay Higher Taxes
Jul 09th 2021
5
I think if this was Jordan it was be a wtf moment
Jul 09th 2021
6
Exactly...I'm scratching my head on why this is even a story.
Jul 09th 2021
7
lol right...i saw the headline pop on my feed a few times and i'm like.....
Jul 09th 2021
8
its just a reminder when you hear owners crying about player salaries
Jul 09th 2021
9
      a reminder of what?
Jul 09th 2021
10

obsidianchrysalis
Member since Jan 29th 2003
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Thu Jul-08-21 05:08 PM

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1. "If I was paying 12% in taxes with his income, I'd geek out at games too"
In response to Reply # 0


  

          

<--- Me when my head hits the pillow

  

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ThaTruth
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Thu Jul-08-21 05:19 PM

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2. "right, grabbing thighs and everything lol"
In response to Reply # 1


          

________________________________________
"Stay out the dark, cause if I catch you when the sun is down..."
https://youtu.be/eaaTxVRG06c?t=89

  

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Rjcc
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Thu Jul-08-21 07:35 PM

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3. "there's levels to this shit"
In response to Reply # 0


          


www.engadgethd.com - the other stuff i'm looking at

  

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Tiger Woods
Member since Feb 15th 2004
17287 posts
Thu Jul-08-21 11:26 PM

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4. "Smarten up Bron"
In response to Reply # 0


  

          

What a weird ass story, are we supposed to feel sorry for him? Figure it out. Most these rich dudes don’t pay taxes like that.

  

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Nodima
Member since Jul 30th 2008
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Sat Jul-10-21 11:25 AM

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11. "Why is this the take?"
In response to Reply # 4


  

          

The article explains that the discrepancy is largely due to Ballmer's purchase of the Clippers. Is LeBron supposed to buy the Lakers?



~~~~~~~~~
"This is the streets, and I am the trap." � Jay Bilas
http://www.popmatters.com/pm/archive/contributor/517
Hip Hop Handbook: http://tinyurl.com/ll4kzz

  

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legsdiamond
Member since May 05th 2011
70707 posts
Sat Jul-10-21 11:45 AM

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12. "well, he is already the GM.. lol"
In response to Reply # 11


          

its crazy how people view Bron on the same level as an owner.

****************
TBH the fact that you're even a mod here fits squarely within Jag's narrative of OK-sanctioned aggression, bullying, and toxicity. *shrug*

  

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40thStreetBlack
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Fri Jul-09-21 01:59 AM

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5. "'The Whiteness Of Wealth' Probes Why Black Americans Pay Higher Taxes"
In response to Reply # 0


  

          

by Emory Law Prof Dorothy Brown. Just saw this segment with her on Amanpour after the game tonight:

https://www.youtube.com/watch?v=ky1l2slZqMc

also:

'The Whiteness Of Wealth' Probes Why Black Americans Pay Higher Taxes

https://www.wbur.org/hereandnow/2021/05/17/us-taxes-dorothy-brown

May 17, 2021
Peter O'Dowd


Chances are, if you're a white taxpayer in the U.S., you're getting a better deal than Black Americans.

That’s according to a new book called "The Whiteness of Wealth: How the Tax System Impoverishes Black Americans – and How We Can Fix It” by Emory University tax law professor Dorothy Brown. She writes that the U.S. tax system has long favored white Americans, effectively reinforcing and creating a staggering racial wealth gap.

Born and raised in the South Bronx, Brown says she’s dealt with racism her whole life. She decided to practice tax law in order to pursue a career where she thought race and racism had nothing to do with her work.

“As I say in the book, I've never been more wrong about anything in my life,” she says.

A mentor of hers wrote an article asking readers to look at the connection between the country’s tax system and race. She decided to interrogate the issue — and immediately ran into roadblocks. The IRS does not publish statistics by race, she says, complicating her efforts.

The more she began to investigate race and tax policies, the more she connected the dots between how the system puts Black Americans at a disadvantage. “All kinds of things that I never realized before became readily apparent,” she says.

Marriage puts the issue front and center, she says. Most married Americans receive a tax cut, “but there is a significant minority of Americans, when they get married, they pay higher taxes,” she says. “Well, as it turns out, if you look at Census Bureau data, which actually does provide this information by race, you see white married couples are more likely to contribute income … that leads to them getting a tax cut.”

However, Black married couples are more likely to contribute income to the household in a way that leads to higher taxes, Brown says.

For example, “let's say someone makes $50,000. As a single person, their taxes are going to be a certain rate,” she says. “But as a married person with a single wage earner, that $50,000 household is going to wind up paying less taxes than that single wage earner had they remained single.”

Census Bureau data shows single wage-earning families are more likely to be white than Black, she says. For example, many of these types of single wage-earning families consist of a working white man — a person who statistically holds a higher paying job than any other identity, she says — and a woman who stays home with the children.

“On the other hand, the couple where both spouses are working full time and contributing roughly equal amounts to household income, they don't get a tax cut,” she says. “That couple is more likely to be Black than white.

Interview Highlights
On her parents’ experience with taxes as a Black married couple, both contributing income to the household

“So I'm doing as any good daughter with an in tax does — our parents’ tax returns — and I'm seeing something's wrong. I'm doing my taxes, and I made, by myself, roughly what my parents made combined. … I was paying more, but not that much more. And I always came away from doing our returns thinking something's wrong and I can't figure it out. And this went on and on until I became a professor and started looking at race and tax. And the very first thing I wrote about was the marriage penalty and the marriage bonus. And it explained why my parents were paying so much in taxes. It was because their incomes were very close together.”

On the consequences of U.S. tax laws being created at a time when Black families were paying into the system but didn't have the same legal rights to housing, employment, education and marriage

“Black taxpayers are paying for our own subordination. And I'm thinking of what happened after World War II, where the income tax system was transformed. It went from only the richest Americans paying it to most Americans paying it. And that happened in the ‘40s when we still had Jim Crow when the would not insure mortgages for homes in Black neighborhoods. So we had taxpayer dollars funding , but HUD's policies and programs discriminated against Black Americans.”

On whether she thinks tax policies were made with explicit racist intent

“I think the tax policies were made with the intent to benefit white Americans, and a lot of the tax policies I talk about in the book are traced back to this Jim Crow era. And if you are a legislator and you think that Blacks are second class citizens and the law tells you Black Americans are second class citizens, then making tax law to benefit white Americans seems very normal and very natural.”

On what’s holding the country back from creating a more equitable tax system

“ not publishing statistics by race is the biggest problem. We have the president's executive order that talks about racial equity across government agencies, including Treasury. But I'm seeing nothing out of Treasury that would give me hope that this is going to turn around.”

On whether President Biden’s plan to change the capital gains tax would help racial discrepancies

“Absolutely, because when we look at ownership of stock, there are huge racial disparities and it goes across income lines. So you could say, ‘well, that's just because Blacks are disproportionately poor and it's really not a race issue, Dorothy. It's a class issue.’ But if you look at high-income Black Americans, if you look at wealthy Black Americans, we don't own stock to the extent that our white peers do. So increasing taxation on this very racialized asset — stock — would make a big difference in racial equity concerns. … So what this would do, for people with income over $1 million, would require income from stock to be taxed at the same tax system as income from wages.”

On her advice to Black taxpayers who have to work inside a system that works against them

“I talk about being a defensive player. So if you're going to get married, don't get married on New Year's Eve, get married on New Year's Day. That delays the issue one year — something simple. If you're thinking about buying a home because of the different returns on homeownership to Black homeowners versus white homeowners, then think about it. Do you want to be one of the few Black homeowners in an all-white neighborhood, which would make it a good financial investment? But you will have to deal with racism from neighbors, perhaps calling the police on you when you're trying to get into your own home.

“On the other hand, you could buy in a racially diverse or all-Black neighborhood recognizing you won't get out of the home as much as if you lived in an all-white neighborhood. So you don't put all of your money in a home. You make sure you max out on your retirement account. You make sure you set up a child savings account for your child to go to college. So you basically become proactive, recognizing that the system isn't designed for Black wealth.”

On white Americans being transparent about wealth disparities

“... I want more white Americans to tell their story, right. I want more white Americans to say ‘I didn't have a college debt problem the way Black Americans do because I had family wealth that paid for my college. I had down payment assistance or because I didn't have debt, I could save money for a down payment.’ Part of what I'm asking white Americans to do is to tell their stories of intergenerational wealth and how it's not that Black Americans aren't working hard enough, aren't saving enough, it's that the wealth-building system is inherently stacked in favor of white wealth building.”

Emiko Tamagawa produced and edited this interview for broadcast with Todd Mundt. Serena McMahon adapted it for the web.

Book Excerpt: 'The Whiteness Of Wealth'
By Dorothy Brown

I became a tax lawyer to get away from race.

I was born and raised in the South Bronx in New York City. My father, James, was a plumber who worked, without benefits, for a private company, because black men couldn’t join the union that controlled the good public-sector jobs. My mother, Dottie, was a nurse and a seamstress who had left her job as a garment factory “floor girl” because she knew she could do better work than the white seamstresses who got all the opportunities. We lived in a three-family house at 1061 Morris Avenue, purchased with the help of a $6,000 loan from my father’s white boss, and rented the upper and middle apartments to black tenants who became more like family. We didn’t have a lot, but we had food on the table and clothes on our backs (handmade by my mother, of course), and my sister and I had a little bit of spending money. My parents had lived through the Jim Crow era and faced laws dictating what they could earn, what they could own, and where they could live, but they were determined that their children’s generation would get educated and live on their own terms.

As a little girl, I believed that was a possibility.

Then, when I was around nine or ten years old, I left the house one day with my mother. I held her hand as we walked to the corner of 166th Street and waited for the light to change. A police car drove by, and as it passed I spotted a handcuffed black man in the backseat. Sitting beside him was a white officer, beating him. It was broad daylight.

I turned in horror to confirm that my mother was seeing this, too. In a low, emotionless voice, she said, “That happens sometimes.”

My eyes returned to the car. The handcuffed man and I made eye contact. As the police car turned the corner, I held his gaze until I could no longer see him.

Normally my mother was no shrinking violet when it came to fighting racism. My sister and I would cringe whenever a white store manager chose to wait on a white customer before us; we knew what was about to happen, and it happened a lot.

“Excuse me!” my mother would say. “We were here first!” She would not use her inside voice, and she wouldn’t budge from the head of the line. Standing her ground—that’s Dottie Brown.

So when I saw that man in the back of the police car, my mother’s reaction told me there was not a thing either one of us could do about it.

And that’s how I became a tax lawyer. Because I learned early on that people might look at me and see black, but as far as tax law was concerned, the only color that mattered was green. I attended Fordham University and majored in accounting, then got my law degree from Georgetown and earned a master’s in tax law from NYU. Tax law was about math, and I was sure I’d chosen a career where race had nothing to do with my work.

I have never been more wrong about anything in my life.

From the book THE WHITENESS OF WEALTH: How the Tax System Impoverishes Black Americans – and How We Can Fix It by Dorothy A. Brown. Copyright © 2021 by Dorothy A. Brown. Used by permission of Crown Books, an imprint of Random House, a division of Penguin Random House LLC. All rights reserved.

This segment aired on May 17, 2021.


<----- Long Live The King

  

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legsdiamond
Member since May 05th 2011
70707 posts
Fri Jul-09-21 07:36 AM

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6. "I think if this was Jordan it was be a wtf moment"
In response to Reply # 0


          

Bron is still an “employee” who gets paid by owners

while it looks fucked up we all know the tax system encourages people to open businesses and rewards them with crazy tax breaks.

Is Bron donating to the IRS simply because he hasn’t figured out how to write off more of his business expenses or is this America at work?

****************
TBH the fact that you're even a mod here fits squarely within Jag's narrative of OK-sanctioned aggression, bullying, and toxicity. *shrug*

  

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soulfunk
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Fri Jul-09-21 08:10 AM

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7. "Exactly...I'm scratching my head on why this is even a story."
In response to Reply # 6


  

          

>Bron is still an “employee” who gets paid by owners
>
>while it looks fucked up we all know the tax system encourages
>people to open businesses and rewards them with crazy tax
>breaks.

  

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Cenario
Member since Aug 24th 2005
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Fri Jul-09-21 08:43 AM

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8. "lol right...i saw the headline pop on my feed a few times and i'm like....."
In response to Reply # 7


  

          

-The Knicks’ coaching search still includes a lone frontrunner, Kurt Rambis, whose qualifications for the position include a strong relationship with Jackson and a willingness to take the job.

  

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ThaTruth
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Fri Jul-09-21 11:06 AM

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9. "its just a reminder when you hear owners crying about player salaries"
In response to Reply # 6


          

________________________________________
"Stay out the dark, cause if I catch you when the sun is down..."
https://youtu.be/eaaTxVRG06c?t=89

  

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legsdiamond
Member since May 05th 2011
70707 posts
Fri Jul-09-21 02:01 PM

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10. "a reminder of what? "
In response to Reply # 9


          

just because owners pay a lower rate doesn’t mean they don’t have to budget for the cap or luxury tax.


****************
TBH the fact that you're even a mod here fits squarely within Jag's narrative of OK-sanctioned aggression, bullying, and toxicity. *shrug*

  

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