There
is an athlete who enjoys a fairly widespread fame among those who
follow the sport he plays. While the sport is not considered one of
the major sports, it does have extensive follow-ship in the US and in
many countries around the world. In the coming summer Olympics, in
2016, the sport will be played for the gold medal. Generally, his
reputation is that, if not the best player of this sport, he is
second or third. He is considered a good family man and has a
beautiful family and is considered a great guy. There have been
personal health concerns for himself, his wife, and his mother. His
sport is one that people by the millions play for recreation. He and
his sport are popular enough to provide him with a very lucrative
career. His yearly earnings from playing the sport range from four
to five million dollars. From endorsements, he earns another $30
million a year. And, of course, there is the income his accumulated
worth earns. His total worth, according to one internet source, is
said to be in the neighborhood of $180 million dollars. He has
worked hard to be proficient in his sport. He provides a great deal
of inspiration and entertainment to millions of viewers. In short,
he is rich because he can gather a crowd.
We
put all these facts together and they provide the context for what
transpired recently. It turns out that his daughter was about to
graduate from eighth grade and she was slated to give a speech during
the ceremony. The athlete was scheduled to begin playing a big event
in his sport – one of the four big events of the year. The
ceremony was set for Wednesday and the beginning of his participation
in the sporting event was to begin on Thursday morning. He arranged
for his presence at his daughter's event and then he hopped on his
private jet so that he could, with little sleep, be at the sporting
event the next morning. The graduation took place in California and
the sporting event took place near Philadelphia. The press picked
up on his jet hopping and portrayed the episode as he being a good
father. I agree. As a matter of fact, I'm a fan of his and
generally root for him. I'm one of those guys who play the darn
sport for recreation and enjoy following it on TV. And I too admire
that he was willing to sacrifice his comfort and concern for the
sporting event in order to be there for his daughter. But there is
one part of the story that some might consider irrelevant, but I
don't. While the press reported on this other aspect initially, it
has been lost sight of since. That part is that the athlete
expressed his opinion over how much he will be paying in taxes now
that his home state, California, has upped the income tax rate.
Before
getting into this part of the narrative, let me point out that the
athlete has tried to disavow what he expressed about taxes and,
perhaps upon reflection, agrees with the sentiment I am about to
share. In short, the athlete complained that he was paying too high
a rate of his income in taxes – taxes that not only included those
going to California but those that go to the federal government. He
indicated that his total tax rate would be around 50%. His later
disavowal of his comments was not so much a rescinding of his initial
message or the facts of his claim but rather he was indicating that
he felt taxes to be a personal matter and he should not vent his
information or feelings in public. But my take is that there is
definitely a public angle to this story.
What
is the worth of a good athlete? How important is he or she to the
betterment of the society? To the commonwealth? Of course, in
attempting to answer such questions, one is led to express opinions,
and we, in a predominately capitalist society, don't depend on
speculation to determine how answers to such questions are formulated
– not in a practical sense anyway. We don't count opinion even if
the opinions are expressed by experts. What we do is
institutionalize markets – mostly free markets – to determine the
worth of individual workers and what services or products they
provide. Of course, the answers to the questions are given in
monetary amounts. History indicates that in terms of providing the
most good for the most numbers, markets, not opinion or force or any
other system, work best. But they are not perfect. I believe this
athlete's case demonstrates this imperfection.
What
makes this athlete so rich? His talent? His hard work? What if
this athlete played his sport in the early 1900s before there was TV
with vast audiences? Having TV leads to the enormous amounts of
money advertisers provide for airing their messages during the
broadcast of sporting events such as the major sporting event
referred to above. He, as a single competitor, would not be as
exposed to the public as he is now; his ability and likability would
not be transmitted to the TV audience, and his name would not be so
well known. If that were the case, the companies that hire him today
to endorse their products would not be interested in hiring him to do
those ads. Or let's say his talent was not in the sport he excels in
but instead badminton. Now badminton as it is played in the Olympics
is not an easy game. It is demanding and calls for every bit of
training and hard work our athlete's sport demands. Yet very few
people can name the top performers of that sport and the sport is
seen only on national TV during the Olympics and not for long periods
of time. There is no badminton player commanding the amount of money
our highlighted athlete makes. In other words, there is no intrinsic
reason for our athlete to make the tens of million of dollars he
makes in terms of the work he has put into the sport. And besides,
for all the inspiration and entertainment he provides, we can surely
survive comfortably without it. It simply, on its own merits, is not
that important. And this is coming from a fan who really enjoys
viewing it and playing it.
So,
for someone in his category complaining about taxes that seem more
than fair considering all of the above factors, I don't only think it
is in bad taste; it reflects an attitude that legitimizes shirking
the responsibilities that are attached to good fortunes which some
among us enjoy. While I'm sure you, if you keep up at all with
American sports, know the athlete I am referring to, I am not using
his name because there are other factors involved. Has the state of
California been responsible in the past with tax dollars? If not and
to the degree it hasn't, is it just that a single group of people is
burdened with rectifying those mistakes? And by so doing, is the
state rewarding bad behavior? These are also legitimate questions
that should be asked and answered. But our athlete's case does bring
up questions of responsibility that befall the different segments of
our society. It does call on us to make judgments about what is the
fair compensation one owes the state for benefits and advantages one
enjoys. I understand that certain officials in the state of Florida
have expressed welcome to this athlete if he should decide to move
there. Florida has no personal state income tax. Generally, the tax
burden in Florida is far less than in California. Our athlete is
free to make the move, and if and when he does, others will have
preceded him. Another prominent athlete – who lives in Florida –
from that sport expressed publicly that he supported what our athlete
said initially.
As
I am alluding, this type of questioning brings in a whole set of
other concerns. For example, which state is meeting its
responsibilities to meet the needs of its people more equitably? I
have dedicated a lot of space in this blog to the importance of
equity and I will not address that here. My present concern is that
when states compete for high income people at the expense of
providing both the opportunities for all to have a real chance in
life or providing the minimal floor of economic well-being so that
all can survive with dignity, then bad consequences emerge. That is,
we are neglecting both the potential cast off of human resources and
inviting the potential harm derived from those segments of the
population disadvantaged by the realities of societal economy. This
latter concern includes the safety and security concerns of the
commonwealth. Whether California taxes too much or Florida not
enough is not what I am passing judgment on here. That is not my
present issue. What I am saying is that hard questions should be
asked about an athlete who can afford to hop on his jet to take in
his daughter's graduation from eighth grade while resenting his tax
burden – a tax burden which is so high because he makes so much. I
don't think our athlete can honestly sing the Jimmy Buffett verse:
The
taxman's taken all my dough
And
left me in this stately home
Lazin'
on a sunny afternoon
And
I can't even sail my yacht
He's
taken everything I've got
All
I've got's this sunny afternoon
In
the summertime1
We
don't know about sailing yachts, but we know he can fly quite
comfortably.
1Buffett,
J. (1994). Sunny Afternoon.
Margaritaville Records/MCA.
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