Will Money Taxed from Pacquiao’s Super-Fight be Enough for the IRS?

As probably all people who at least casually follow sports know, Floyd Mayweather and Manny Pacquiao will finally be squaring off against one another on May 2. Many sports fans wanted the fight to first take place as far back as six years ago. But hey, better late than never, I guess.

What a lot of sports fans don’t know is that Pacquiao has been engaged in his own fight against both the IRS and its Filipino counterpart, the Bureau of Internal Revenue (looks like other countries have tax collecting monstrosities just like we do). The Philippine (where Pacquiao is from) Government levied a tax evasion case against him and is attempting to obtain the equivalent of 75 million US Dollars from the boxing champion. Meanwhile, the IRS has slapped on a federal tax lien for $18.3 million in allegedly unpaid taxes for 2006 through 2010. Pacquiao claims that a treaty between the US and the Philippines prevents his money from being taxed twice.

In his last fight, Pacquiao faced Chris Algieri in Macau, China rather than a popular US bout destination. As a result, he was able to save millions of dollars since his earnings were not subjected to the 39.5% US income tax rate for top tax earners. The combined tax rates of the Philippines (20%) and Macau (12%) still leave the fighter with a bigger payday than the one he would have had if the fight occurred on US soil. Pacquiao’s desire to avoid taxation does cause one to wonder why he campaigned for Harry Reid in 2010. Guess everyone is a conservative when it comes to their own money.

Perhaps the man known as “Pacman” would ideally want his fight with Mayweather to occur overseas as well. But given the enormous payday for both fighters, ($120-150 million for Mayweather, $80-100 million for Pacquiao) those concerns may have been dismissed. Consequently, the US government will be able to extract the full top tax bracket amount from each fighter as a result of the fight taking place in Las Vegas.

Given the amount of money that the US Government is about to receive from Pacquiao, it brings to mind the usual claims made on behalf of the state as to why taxes are collected. I’m sure that we are all familiar with these claims. But remember, Pacquiao is not an American citizen. His home is in the Philippines. So when assessing the government claimed reasons for wealth confiscation, consider the following questions while keeping in mind the amount of money Pacquiao will be giving to the US Government and that same government’s claim that what he has given isn’t enough (hence the $18.3 million lien).

• Will Manny Pacquiao ever receive Social Security? (I realize that he likely won’t need it since he’s a multimillionaire, but still).

• Will any of Manny Pacquiao’s five children ever go to a school receiving money from the US Department of Education?

• How often does Manny Pacquiao drive on an American road?

• Is a top priority of the US Military the defense of the Philippine coastline? (not that it should be). Or to put it differently, do Filipino Citizens feel safer as a result of the actions of the US Military?

• Will Manny Pacquiao or his family be able to receive Medicare or Medicaid at any point during their lives?

It isn’t difficult to see that Pacquiao’s return on investment for his American taxes is pretty horrible. He may as well have sat in a room with the IRS and said “I’ll have the biggest fight of my career here in the states and you can take 39.5% of my earnings while I derive virtually no benefit from the money you take from me.” Will the IRS then back off their harassment of the prize fighter as a result of this decisively one sided deal? My guess would be no.

If Pacquiao’s tax troubles haven’t caused you to feel sorry for him since he can get through it more comfortably due to being wealthy, consider that the IRS routinely harasses those who have far less wealth he does. And if one of the world’s highest paid athletes won’t be able to negotiate his way out of this harassment, what chance could the rest of us possibly have?

Government Does The Worst Kind Of Gambling. But Of Course, It’s Legal When They Do It.

NBA Commissioner Adam Silver sparked some significant discussion back in November when he came out in support of legalized sports gambling. He submitted an article to the New York Times where he proposed that wagering on professional games should be legalized and regulated. These comments made him a revolutionary voice among other sports commissioners both past and present. So much talk was initiated by Silver’s opinion that ESPN devoted their entire February 2015 magazine publication to the debate by titling it “The Gambling Issue.”

Part of Silver’s reasoning for his new position stems from a desire to better eradicate some of gambling’s shadier characteristics rather than a support for every consequence that gambling may entail. In the aforementioned ESPN the Magazine issue, he is quoted as saying:

“One of my concerns is that I will be portrayed as pro sports betting…But I view myself more as pro transparency. And someone who’s a realist in the business. The best way for the league to monitor our integrity is for that betting action to move toward legal betting organizations, where it can be tracked. That’s the pragmatic approach.”

Of course, libertarians and other liberty minded people know this argument all too well. It is the argument they use to support the legalization of other vices that the government has criminalized. Their support for ending the drug war (for example) is more about taking power away from drug cartels and drug dealers through the same transparency Silver describes rather than championing actual drug use. Yet uninformed people will no doubt label Silver as “pro sports betting” just as they label those who advocate drug legalization as “pro drug use.”

But when one thinks about the audacity of a government preventing its citizens from engaging in voluntary wagers of their own money, it becomes easy to see the hypocrisy at play. First of all, Merriam-Webster’s Dictionary defines “gamble” as “to play a game in which you can win or lose money or possessions.” And of course, no one gambles with money or possessions quite like governments do. It’s easy to see why they do this. Since all money government has it obtained from other individuals, it is less likely that government will behave responsibly with it.

The examples of these failed state supported gambles with public money are numerous and seemingly never ending. Senator Tom Coburn (R-OK) publishes his annual “wastebook” detailing the ridiculous programs the federal government spends money on. On the state level, boondoggles like California’s high speed rail, Seattle’s highway tunnel and Pennsylvania’s incinerator are only some of the more glaring cautionary tales.

Add to all of this the fact that the money spent to build the stadiums where the sporting events take place is often seized via taxation from the public. And so many times those subsidies are not even worth the return on investment.

So it’s not just that government gambles away money that initially belonged to other people. It also prevents those people from gambling on sports with their own money despite the fact that the facilities containing the sporting events are paid for by those same taxpayers. Perhaps it’s time for members of government to enter a gamblers anonymous program.

Olbermann Knows That This Wasn’t the Redskin’s Inaugural Season, Right?

There’s no question that this has, by virtually every measure, been a terrible NFL season for off the field issues. It would be hard for anyone to dispute this. The bigger indiscretions which dominated the headlines were mentioned as part of a four minute rant by ESPN’s Keith Olbermann in which he mentioned the reasons for why he doesn’t care about and will not watch this year’s Super Bowl. Here is the quote specific to these issues (said sarcastically, of course):

“Support the National Football League which brought you Ray Rice and Adrian Peterson and Ray McDonald and the racist team name in Washington and Roger Goodell, and all of them just this season.”

Olbermann is correct when identifying that the infractions committed by Rice, Peterson and McDonald were confined to this past year. Certainly the NFL didn’t “bring us” Goodell in that time. He has been the acting commissioner of the NFL since 2006. But I’d imagine that he’s referring to Goodell’s well documented botching of the Rice aftermath. So that at least fits. But to claim that the NFL “brought us…the racist team name in Washington…just this season” is pretty misleading.

The Washington Redskins were first established as a team in 1932. So if the nickname is truly racist, as Olbermann clearly believes it is, then it has been racist ever since then. The nickname did encounter some new opposition this season as both football studio personalities Tony Dungy and Phil Simms claimed they would no longer use the word “Redskin.” In addition, retired NFL referee Mike Carey said he didn’t work games involving the Redskins because he felt the term was “disrespectful.” But opposition from new sources hardly means that the team’s allegedly racist nickname somehow burst onto the scene this season above all others the same way that the Rice, Peterson and McDonald assaults did.

It doesn’t appear that Olbermann is so ignorant as to actually believe that Washington’s professional football team either didn’t have this nickname until this season or that somehow, the nickname wasn’t racist until this season. In the same video, he talks about how he has worked for NBC Sports and Fox Sports in addition to ESPN. Clearly, this overlapped with the Redskin’s existence that has spanned from 1932 until the present.

So why then does Olbermann falsely claim that the NFL “brought us” this “racist team name” during this season specifically? Well, notice how he places it strategically in the midst of other horrible occurrences that plagued the league this year. This is, of course, meant to stir up emotion about actual crimes of violence that took place either during the year or in the off season. Then, with you in this emotional state, Olbermann cleverly places a controversial issue he feels passionately about but has been an ongoing issue for a long time amidst these violent crimes. Perhaps he hopes that without actually thinking about it, his viewers will lump a controversial team name that has been in existence for over 80 years with women and children being beaten and act like they all somehow culminated in the same season when they clearly didn’t.

Sadly, Olbermann still could have mentioned the ongoing Redskins name saga along with the aforementioned instanced of violence as something that continuously acted like a thorn in the side of the league. But where he went so wrong was to present the name controversy as something that was specific to this NFL season when it is certainly not. All of us who follow the NFL can expect to hear more about this controversy as the years go on. What Olbermann said could have been accurate if he were to say something like this:

“Support the National Football League which brought you Ray Rice and Adrian Peterson and Ray McDonald all just this season. Plus, you can throw in the league’s ongoing drama with the racist team name in Washington.”

There’s nothing technically wrong with that statement (for the record, I’m not claiming that the Redskin’s name is offensive or not as I will save that for a future article). No implying that the nickname’s controversy was initiated this year or that the alleged racism of the name became an issue during this specific NFL season above all others.

Hopefully Olbermann’s future rants will be a little less misleading. I know, since it’s Keith Olbermann we’re talking about, this may be a little too much to ask.

Realizing the Folly of Sports as Economic Stimulus

As Super Bowl XLIX descends upon us, once again we see evidence that sporting events are not responsible for wildly successful economic surges. The most recent blow dealt to this bogus claim came from Glendale, AZ (the sight of this year’s Super Bowl) mayor Jerry Weiers when he said of the game “I totally believe we will lose money on this.” Weiers also claimed that that Glendale lost more than one million dollars when it hosted their last Super Bowl in 2008. So it appears he knows what he’s talking about.

These claims come as no surprise to libertarians who know that sports events and complexes are often nothing but public works projects involving shady deals between governments and corporations. But what is somewhat of a surprise is that an article highlighting these shortcomings was featured on ESPN. It was rather strange to see an organization so consumed with sports actually feature an article admitting the failure of sports as an economic godsend. So perhaps there is some hope in challenging this fallacy.

But of course, it isn’t just the Super Bowl that is guilty of mass corporatism. The entire NFL operates this way. Billionaire owners often get the cities they reside in to shell out tax dollars for new stadiums. Subsidies toward NFL teams are so common and yield so little in return that it’s legitimate to wonder if a city having an NFL team is worth it.

So what is the libertarian, free market solution to fix the problem of the rampant corporate-state sports alliance? Well, like most of our other solutions, it would involve the complete removal of government from being able to offer this money in the first place. No doubt many will claim that those who want this money removed from the process will cause these sporting events, stadiums and professional leagues to not exist. But of course, this is complete nonsense. It’s no different from the claim that libertarians objecting to the government funding of transportation, science or commerce would cause those things to not exist. It harkens back to the quote from Frédéric Bastiat in his legendary 1850 masterpiece The Law:

“every time we object to a thing being done by government, the socialists conclude that we object to its being done at all. We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain.”

Since there was no NFL at the time of Bastiat, he wasn’t around to see the state involve itself in that organization. But it would echo the theme of The Law to say that “we object to having state sponsored sports franchises. Then they will say that we want no sports franchises at all.” Given the amount of revenue professional sports leagues generate in America, it would be quite difficult to claim that they would not exist without the state’s involvement.