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This is almost always the case when you are reading about “the rich evading taxes” — the “loopholes” involves are typically just standard tax code tools that we
by xyzzyz 5y ago
This is almost always the case when you are reading about “the rich evading taxes” — the “loopholes” involves are typically just standard tax code tools that were put there for the reason (to incentivize certain behaviors), and the “evaders” typically just use them in exactly the way they were meant by legislators to be used.
- SV_BubbleTime 5y agoWhen reading these articles just replace “loophole“ with “totally legal process” and see if it still seems wrong. The word has a nearly constant emotional appeal now. I can think of another topic that it is used a ton and means less than nothing. It should be considered bad writing by now.
- KingOfCoders 5y agoYes, but the question is: Is this because those people are buddies of politicians and so politicians reward that behaviour because those people want to own teams? It is often difficult to find out about what is the cause and what the effect.
- deleted 5y ago[deleted]
- xyzzyz 5y agoDepreciation was introduced to US tax code in 1909. If the legislators want to vindictively punish owners of sports teams, and deny them use of tool that’s available to everyone else, then they have to do it by new explicit rule making. However, it is beyond clear that it is not being “buddies” with politicians that allows sports team owners to depreciate them.
- KingOfCoders 5y agoDepreciation for players in sports teams was introduced in 1909? Didn't know, I'm not from the US, so thank you.
- xyzzyz 5y agoNo, the point is that there is no special treatment in the tax code with respect to depreciation and sports teams. Same rules as for everything else apply.
- KingOfCoders 5y agoSome would argue that a factory machine that breaks over time is different from a sports player who gets better and more valuable over time. But I guess if you squeeze your eyes hard enough, everything looks the same.
- bart_spoon 5y agoKind of depends. Every player eventually depreciates in value as age and wear increases. Some players will first appreciate as they hit their prime, but not all.
- kristofferR 5y agoPlease read the article next time. "Congress inaugurated the modern era of amortization by simplifying the rules in 1993: Under the new regime, the purchaser of a business would be allowed, over the span of 15 years, to write off more types of intangible assets. This might have been welcome news for the sports business. But Congress explicitly excluded the industry from the law. Following lobbying by Major League Baseball, in 2004, sports teams were granted the right to use this deduction as part of a tax bill signed by President George W. Bush, himself a former part owner of the Texas Rangers. Now, team owners could write off the price they paid not just for player contracts, but also a range of other items such as TV and radio contracts and even goodwill, an amorphous accounting concept that represents the value of a business’ reputation. Altogether, those assets typically amount to 90% or more of the price paid for a team."
- deleted 5y ago[deleted]
- freeone3000 5y agoSports teams are capital assets whose value decreases over time? I mean, if you use the definitions of words, yes. If you use a reasonable perspective -- no, this isn't true, the value of a team is reasonably independent of the purchase price, the asset's value and earning capacity fluctuate over time, and it's a collection of people you're paying salaries to, not a fixed asset.