If the Trump administration is looking for ways to offset the cost of extending the Tax Cuts and Jobs Act, eliminating subsidies for sports venues would be a fantastic start.
Public financing for stadiums funnels taxpayer dollars into projects that could be funded by the billionaire team owners who benefit from their construction. The justification for public funding usually points to the facility’s potential to create jobs and economic activity. But such projects yield little, if any, economic return to local communities.
Studies have shown that publicly funded stadiums fail to deliver on their public interest promises. Cities shell out hundreds of millions of dollars in subsidies and rarely see meaningful increases in jobs, wages, or sales and use tax revenue.
This is because most of the money spent at sports venues is money that would have been spent elsewhere in the local economy. A family who buys stadium tickets often shifts spending from other options such as restaurants and movie theaters, so the local community doesn’t enjoy additional economic benefits from the publicly funded sports venue.
A bigger problem is the opportunity cost of allocating public funds to the sports venue. Every dollar a city redirects to a stadium is a dollar not spent on affordable housing, infrastructure, or education. Unlike stadium subsidies, these investments have measurable and predictable positive returns.
Cutting stadium subsidies that help billionaire sports team owners in order to extend TCJA tax cuts that disproportionately benefit wealthier individuals may seem like a wash in the near term. But normalizing the idea that sports teams should pay for their own playgrounds could be a huge long-term win for fiscal responsibility.
The era of taxpayer-funded stadiums should end. If sports teams want new venues, let them foot the bill—just like any other private business.
—Andrew Leahey
Welcome to the Week in Insights for Bloomberg Tax’s latest analysis and news commentary. This week, experts analyzed the requested reassignment of IRS-CI special agents to immigration enforcement duties, the future of Canada’s digital services tax and proposed undertaxed profits/payments rule, and more.
Insights
Hanson Bridgett’s Alison Wright and Soohuen Ham say employer-sponsored retirement plans offer disaster relief loans and that the accounts keep growing if lenders make timely repayments.
Osler’s Kaitlin Gray and Patrick Marley say Canada could abandon part of its digital services tax to mitigate the risk of US tariffs, and that Canada’s undertaxed profits rule is also part of potential fallout from President Donald Trump’s memo on the OECD global tax deal.
McCarter & English’s Michael Puzyk and Paul Buonaguro say border tax credits favor commerce with Canada but that states’ systems should benefit all or no foreign jurisdictions.
Ogletree Deakins’ Stephanie Smithey and Carly Grey say retirement plan sponsors should document and communicate changes to ensure plans are administrated effectively and fulfill fiduciary duties.
Baker Tilly’s Colin Walsh analyzes the IRS’s centralized partnership audit regime, saying budget clawbacks and new administrative priorities could delay improvements.
Tax Foundation’s Erica York urges permanent full tax deductions for capital investment, saying permanence would generate the most growth for the least revenue loss.
KPMG’s Maurits Stuyt and Sjaak Brinks explain the EU’s final public country-by-country reporting guidance and outline questions that remain for multinationals implementing it in EU member countries.
Former IRS special agent Jonathan Schnatz says reassignment of investigators away from financial crime is the wrong move, and that collaboration is already happening with border enforcement.
Akerman’s David Blum, Stefi George, Lauren Ferrante say multinationals should reassess their tax reporting in all states and carefully track employees’ presence, following an Illinois circuit court ruling that rejected PepsiCo’s application of the 80/20 exclusion rule.
Columnist Corner
Upfront bridge loans would give office-to-residential conversions a major boost in capital, enabling faster project completion and reducing urban housing crunches, Andrew Leahey says in his latest Technically Speaking column.
“This model should be an easy sell politically,” Andrew argues, adding that the general concept has already worked in other contexts, such as Wisconsin’s loan program for senior housing development. Read More
News Roundup
Thousands of IRS Firings Foreshadow Delays, Enforcement Drop
Thousands of cuts to the IRS workforce threaten to throw a wrench in the agency’s plans to ramp up tax enforcement and will likely delay refunds for complex filers. Read More
Corporate Transparency Deadline Set, but Uncertainty Still Looms
US businesses preparing to disclose their beneficial ownership information to the government under its new March 21 deadline to enforce the Corporate Transparency Act could see the compliance date pushed back again. Read More
OECD Seeks Comment on Global Minimum Tax Return Validation Rules
The OECD is soliciting feedback from the business community on an additional set of “validation rules” that will accompany the global minimum tax return. Read More
New Jersey Sets Up Rules for More Companies to Pay Income Tax
New Jersey’s latest rulemaking is a warning to out-of-state companies that tax officials will be more assertive in subjecting them to state income tax if they conduct certain internet activities in the Garden State, tax practitioners say. Read More
Tax Management International Journal
Anshu Khanna of Andersen Global unpacks the global tax impact of India’s newly announced Union Budget 2025.
Tax Management Memorandum
Holland & Knight’s Ryan Phelps and Bryan Marcelino discuss the practical implications of the newly proposed Section 355 rules that would employ bright-line safe harbor rules as well as new reporting requirements.
Career Moves
Michael Desmond joined Miller & Chevalier Chartered as a member and co-leader of its tax controversy and litigation practice.
David Strong joined WilmerHale as a tax partner in its transactional department in Denver.
J. Allen Sullivan Jr. joined Bradley as a partner in its corporate and securities and tax practice groups.
Tom Geraghty joined Vedder Price as a shareholder in its corporate tax and estate planning practice group in Chicago.
Aalok Virmani joined Cooley as a tax partner in its fund formation practice group in Chicago.
Peter Lagonowicz joined McCarter & English as a partner and leader of its international tax practice in Miami.
If you’re changing jobs or being promoted, send your submission to TaxMoves@bloombergindustry.com for consideration.
To contact the editors responsible for this story:
Learn more about Bloomberg Tax or Log In to keep reading:
Learn About Bloomberg Tax
From research to software to news, find what you need to stay ahead.
Already a subscriber?
Log in to keep reading or access research tools.