Archive - February 2014
- Column: Taxing Olympic Gold...And Silver and BronzeFebruary 24, 2014
There are two things all Americans can agree on: We love our Olympic athletes and we hate taxes. That means we can all agree on exempting Olympic athletes from paying taxes on their Olympic winnings, right? Well, maybe not. The first thing you should know is that Olympic gold medals are a misnomer. Although the medals weigh 531 grams, there are only six grams of actual gold in each medal. The balance is silver. At today’s street value for both metals, a gold medal is worth approximately $550. That amount is considered taxable income to medal winners.
- Column: MLB Allows Teams to Drop PensionsFebruary 17, 2014
On the eve of spring training, Major League Baseball owners voted to give clubs the option of eliminating pension plans for some uniformed and all non-uniformed employees. Reaction to the move was almost unanimously critical. Prior to the vote, MLB clubs were required to offer traditional pension plans to Minor League employees - coaches, trainers, scouts - and non-uniformed MLB personnel, those who toil away in the front office. Traditional pension plans, known as defined benefit (DB) plans, guarantee retirees a fixed pension amount based on a formula that considers an employee’s earnings, years of service and age at retirement. In most cases, employees get what they are promised. However, if an employer goes bankrupt or the company pension plan goes belly up, the “guarantee” could be in jeopardy. Fortunately for private sector employees, the federal government maintains an insurance fund for such occasions, although pension payments are subject to being reduced.
- Column: Jock Tax UnfairFebruary 10, 2014
Denver Broncos quarterback Peyton Manning took two beatings last week, one from Seattle in the Super Bowl and a second one from the New Jersey taxman. And unlike the game itself, no matter how well he played, there’s no way he would have beaten the tax collector. It’s called the “Jock Tax,” a tax on the income of professional athletes who live in one state and play games in another. Here’s how it works. Take Peyton, he of the $15 million annual salary. The Broncos spent eight days in New Jersey preparing for and playing in the Super Bowl. New Jersey tax law maintains that a portion of Manning’s salary is therefore earned while on state soil. The NFL season is approximately 235 days – referred to as “duty days” - long. Therefore, approximately 3.4 per cent of Manning’s $15 million salary, or $510,000, is taxable in New Jersey.
- Column: The Greatest CommissionerFebruary 2, 2014
David Stern retired on February 1 after 30 years as NBA commissioner, the longest tenure of any of his predecessors. His counterpart in MLB, Bud Selig, is set to retire in less than a year after 22 years in office. Which leads to an interesting debate: Who is the greatest sport commissioner of all time? According to one publication, the debate was rendered moot a long time ago. In 1991, after only seven years on the job, Sports Illustrated anointed Stern the “best commissioner in sports…the equal of [former NFL Commissioner Pete Rozelle] and baseball’s…[Kennesaw Mountain] Landis.” Not so fast.