Tags: athletes | obama | taxes

Professional Athletes Mull Tax Moves Before Hike

Wednesday, 05 Nov 2008 05:19 PM

By Mike Tighe

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Professional sports teams' locker rooms are abuzz with chatter about changing the athletes’ playbooks to lighten the hit to their checkbooks if President-elect Barack Obama follows through on his plan to increase income taxes on higher earners.

Such an increase, which would boost the top federal income tax level from 35 percent to the 39.6 percent spot it held under President Clinton, would affect virtually every Major League Baseball player. The minimum annual salary in the MLB will be $400,000 next year, according to The Associated Press.

The issue is a topic of conversation at the baseball general managers meetings that began Wednesday in California. And it has been kicked around among football players and fans on Internet blog fields for weeks as they have pondered possible financial consequences of the presidential election.

Even before Barack Obama was elected Tuesday, team owners also were considering moves to blunt the effect of his proposal to increase the capital-gains tax.

Miami Dolphins owner H. Wayne Huizenga told the South Florida SunSentinel Oct. 26 that he might try to move up his sale of 45 percent more of the team to Stephen Ross.

Obama "wants to double the capital gains tax, or almost double it," Huizenga said. "I'd rather give it to charity than to him."

Ross bought 50 percent of the team and Dolphin Stadium for $550 million this year, planning to become majority owner eventually. NFL owners have endorsed the agreement, meaning it can take place anytime.

If signing bonuses are paid before Jan. 1, they probably would be taxed at the present rate, according to AP.

At the baseball meetings, agent Scott Boras told AP that he has considered asking for larger signing bonuses payable this year in contracts for some of his players. Among those contracts are possible eight- and nine-figure deals for free agents Manny Ramirez and Mark Teixeira.

Free agents can't start negotiating money with all teams until Nov. 14, and only a few contracts are wrapped up before Jan. 1, AP reported.

Players’ agents reportedly had paid more attention to the tax consequences than team general managers. Several team representatives told AP they wouldn't be able to determine until after Nov. 14 whether efforts to beat a tax hike have become a trend.

"It's not off the wall," said Andrew Friedman of the American League champion Tampa Bay Rays.

"We'd certainly be open-minded to it, depending on what the rest of the terms of the deal are," he told AP.

Oddly enough, in August, SportsAgentBlog.com reported that many professional athletes, including golfing behemoth Tiger Woods, were supporting Obama, while owners were backing John McCain. Those support patterns bucked the tradition of most athletes' being conservatives or Republicans for tax reasons, wrote blogger Darren Heitner.

“It definitely makes sense, which is why I was not surprised to hear that a large portion of NFL, NBA, NHL, and MLB owners support John McCain,” Heitner wrote. “If athletes have an incentive to vote Republican based on lower taxes, then owners should be even more inclined to lean to the right, as they are in an even higher tax bracket.”

Now that the election has gone wide left and forced a square-off, it’s time to see whether the puck stops here.

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