Update: I just want to note that I take nothing away from Derek Jeter's talents as a baseball player and what he has accomplished as a New York Yankee. My point in this diary is that even people who are our heroes are taking advantage of a system that is rigged in their favor. Out of respect to one commenter, I changed the title -- adding a question mark.
New York officials are pursuing a tax case against Derek Jeter, alleging that the superstar Yankee shortstop skipped out on millions of dollars of taxes from 2001 to 2003.
In court filings, the officials say Jeter falsely claimed residence in Florida, which has no income taxes, to dodge city and state income taxes in New York, where he owns a residence.
What makes this especially galling is that New York taxpayers are paying more than $400 million towards the construction of the Yankees' new stadium.
That's right, at the same time that Jeter is refusing to pay his fair share of taxes, New York taxpayers are helping to build his new office. Indeed, just last month the city agreed to spend an additional $225 million, up from the original price tag of $200 million.
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The boondoggle in the Bronx
The Yankees are getting a host of other concessions from the city, including a rent-free lease and the right to sell the name of the stadium, which could easily go for over $500 million. (The Mets' sold the name on their new stadium to Citigroup for $400 million.)
If you're a baseball fan, you should also know that under baseball's revenue sharing plan, the league's 29 other teams will end up paying $400 million of the ballpark's price tag. Under the revenue sharing plan, the Yankees are allowed to deduct a new stadium's debt service from their payroll when calculating the baseball luxury tax, which goes to the revenue sharing pool. For the Yankees, this will total between $300 and $400 million.
In all, the new Yankees' stadium will cost $1.2 billion, but taxpayers will pick up at least $425 million of that tab. Conservatively, the team will save $300 million in luxury taxes, and sell the name of the stadium for $400 million (also conservative). Net/net, the actual cost to the Yankees won't be more than $100 million -- and they might actually make money on the construction deal alone.
Moreover, they will certainly make more money from the new stadium, which will have "enhanced" revenue streams, like luxury suites and other amenities designed for the wealthy elite.
In short, New York taxpayers are victims of one of the all time biggest rip-offs in sports history. It's welfare for the richest team in baseball, and it's ridiculous.
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By dodging his taxes, Derek Jeter adds insult to injury.
Jeter's doing pretty well now -- he earns $21.6 million per year.
But he stands to benefit from the Yankees' boondoggle in the Bronx, because shortly after the stadium opens its gates for the first time, he will become a free agent -- and will certainly command a premium salary from the wealthiest sports franchise in world history.
Jeter's selfishness is an outrage, and reflects an attitude among many super-wealthy Americans that they live under different rules than the rest of us.
They may resent government, but they derive benefits from it just as much as we do. In fact, often, as is the case with Derek Jeter, those benefits are far greater than anything we would wish for in our wildest dreams.
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Jeter personifies today's super-wealthy elites.
They are among the most selfish of American citizens, decreasing their relative contribution to the tax pool while asking the rest of us to tread water, all the while and insisting on even more breaks.
As you can see from this chart, the super-wealthy (the upper 0.5%, who earn over $1,000,000 on average) are doing better than ever, but their taxes are dropping dramatically. Meanwhile, for the lower 99.5% of Americans, there has been no tax relief, even as their real income remains relatively flat. (Data source: Thomas Piketty and Emmanuel Saez.)
In the context of the Yankees' new stadium deal and the overall tilt of the American tax code towards the super-wealthy, Derek Jeter's refusal to pay his fair share of taxes is extraordinarily repugnant.
Go Sox!