New England Patriots owner Robert Kraft (C) listens to U.S. President Donald Trump deliver remarks during an event celebrating the team’s Super Bowl win on the South Lawn at the White House April 19, 2017 in Washington, DC.
President Donald Trump Tuesday said it may be time to close tax loopholes that benefit wealthy owners of professional sports franchises.
If so, the Trump administration will have to rewrite its own tax reform plan.
“Why is the NFL getting massive tax breaks while at the same time disrespecting our Anthem, Flag and Country?” Trump tweeted on Tuesday. “Change tax law!”
But the Trump administration’s own proposed tax plan is silent on one of the biggest tax breaks enjoyed by franchise owners in the NFL and other professional sports leagues.
Nothing in the proposed tax reform package would overturn the lucrative tax break that franchises in multiple leagues have enjoyed from the financing of new stadiums with tax-free municipal bonds.
That tax break takes two forms. First, the team owners take advantage of cheaper financing because the interest rate on municipal bonds is lower than a comparable taxable bond. A second tax break goes to the investors who buy those bonds, who pay no tax on the interest earned.
Since 2000, new major league stadiums financed with municipal bonds have cost the U.S. Treasury some $3.7 billion, according to researchers at the Brookings Economics Studies program.
The biggest break went to the New York Yankees, which financed more than half the cost of its new stadium, completed in 2009, with municipal bonds, according to the researchers.
The total cost to U.S. taxpayers was $492 million, they estimated.
Here are the federal tax subsidies that went to dozens of other professional sports stadiums built since 2000.