Most new taxes will go right back to Pistons, Detroit News calls this “big win” for public

Time for today’s episode of poorly explained tax revenue implications of new sports projects! Our contestant is the Detroit News, with its headline:

Pistons, concerts could be big tax win for Detroit

That is quite the promise! How does News reporter Louis Aguilar work that out? Detroit has a 1.2 percent “jock tax” on athletes and entertainers who play or perform in the city while living elsewhere, and that, say Pistons officials, would provide the city with about $4 million a year in new income tax revenue, assuming all the concerts that would have gone to the Palace of Auburn Hills relocate to the new Detroit arena with the team if that arena is eventually demolished. That’d be worth about $60 million in present value, so: moneyz!

Of course, the city of Detroit is paying the Pistons $34.5 million to move in with the Red Wings in their new arena, so most of that big tax win will be going straight back to the team. It still means that, if the estimates are accurate — they were done by the Pistons, remember, and a tax attorney way down in the 15th paragraph of the News article notes that many entertainers and athletes may have tax shelters set up to avoid paying full jock taxes — the deal to bring in the Pistons was worth it for the city, if your definition of “worth it” is giving up most of the tax benefits you’d normally get from a business relocating to your city in order to get the business to relocate in the first place.

Also, of course, there’s the little matter of the $50 million in land that the city sold to the Red Wings for $1 to make the arena happen in the first place, plus the $266 million that the state of Michigan is spending to move two of its sports teams and a bunch of concerts from one part of the state to the other, and … I’m not sure what headline I would have gone with, but “big win” probably isn’t it.

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5 comments on “Most new taxes will go right back to Pistons, Detroit News calls this “big win” for public

  1. Well its a big win for “journalists” because jobs are scarce at papers these days and sports pages drive a huge portion of the overall “journalism” traffic.

    It really is at the core of why this issue is so badly reported. Just too much conflict of interest from the main places where you might encounter accurate reporting.

    Honestly though this problem is just rife throughout the industry though. If you follow say the higher education beat, anything regarding labor disputes, or diversity issues will be well researched and two sided. But anything related to spending more money is basically just a rewritten press release from the University President.

  2. The Detroit News would cover the Pistons and Red Wings if they were playing in Auburn Hills. It is more likely the author is trying to put out a slanted puff piece that both ownership and the stadium groups will like in a slow period to fill needed space and also gain favor for later articles.

  3. He’s one of their regular reporters, I doubt he has a dog in this race. If anything, this appears to be “Hey, the Pistons sent over a press release, go gussy it up with a couple of quotes and get it online, we have social media accounts to feed.”

  4. Jock taxes are pretty interesting. They were started in the early 90s when some California legislatures saw a way to make some coin off of Jordan and the Bulls beating up the Lakers in the Finals. Illinois retaliated and they grew from there to where most states now have them. Then some cities started wanting in on the action. Cleveland had theirs declared unconstitutional a couple years ago. They were charging it to players who were injured and didn’t even travel to the games and also ignoring the section in the law that said the tax wasn’t supposed to apply unless the person spent at least 2 weeks a year working in Cleveland.

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