The Boston Red Sox easily handled the St. Louis Cardinals in the 2004 World Series, winning 4-0. But they couldn’t beat the taxman. Both clubs were smacked by the “jock tax” in the other team’s city.
The jock tax was created in California, a singularly childish act of revenge against Michael Jordan and his Chicago Bulls, who had the audacity to beat the Los Angeles Lakers in the 1991 NBA finals. Illinois followed a year later with its own jock tax. But the only players it hit were those from states that had a jock tax, which means it was directed solely at California professional athletes. How’s that for thoughtful and equitable tax policy?
Now 20 states have the jock tax, which is a double tax and unfair by definition. Rates range from 3 percent (Illinois) to 9 percent (California). In some cases entertainers are also subject to it when they work in cities other than their hometowns.
Players and entertainers aren’t the only sources of easy tax revenues for covetous lawmakers. Also targeted are team managers, coaches, trainers, broadcasters and other traveling members of teams — what we might call the “athletic supporters” — none of whom are paid as well as players.
What’s behind all of this is that states want to collect income taxes from highly paid people who travel to another state to perform — as athletes do on away games.
But physicians, pilots, professional golfers, female professional basketball players and trial lawyers, to name a few who often work away from home, don’t have their salaries and winnings taxed twice.
These exceptions aren’t likely to last forever. Elected officials usually find a way to apply selective taxes to broader populations (can anyone say Alternative Minimum Tax?).
Of course, taxing one group (e.g. football players) and not another similarly situated group (e.g., professional golfers) appears to violate the Equal Protection clause of the Constitution. So the day will likely come when everyone with out-of-state earnings will have to pay the jock tax, or no one will. And so the question is: Are you a supporter?