Detroit Finds a Way to Collect More Income Tax from Pro Athletes Playing Here
March 6th, 2017, 10:27 PM
Talk about pay to play -- that's what Lions, Tigers, Wings and Pistons players living outside Detroit will do under a revised city income tax formula that also applies to visiting teams.
Tom Gantert, managing editor of a Michigan Center for Public Policy blog called Capitol Confidential, explains what's up:
The city of Detroit will get a tax collection boost once the Pistons basketball team relocates to a new downtown arena. The boost will come . . . from a city income tax levy on professional athletes that reaches far more deeply into their wallets than [for] other non-residents who work part-time in the city.
The city has created its own formula for defining the days supposedly covered by the salaries earned by professional football, baseball and hockey players. The definitions have the effect of greatly increasing the tax bite on players who don’t live in Detroit.
Basketball moves to downtown next season, and members of the Detroit Pistons will feel a heavy pinch.
Based on the formulas provided for the other sports teams, Andre Drummond -- the highest-paid Detroit Piston and projected to earn $23.8 million next season -- would pay about $158,500 in Detroit city income tax [annually].
This "jock tax," also widely used elsewhere to generate extra revenue, classifies team staff members and players as working in Detroit from the day they arrive until they leave after a game.
Detroit's revised formula, issued March 1, means Miguel Cabrera would pay an estimated city income tax of $152,899 each year, according to Gantert. He dives in:
The tax is “apportioned” on visiting athletes based on the number of days they are in the city for game-related activities – “city days” – divided into a roster of “duty days” the city has invented. This has the effect of greatly increasing how much the city can extract from players, compared to using an annual salary in the formula.
For professional baseball players, the number of “duty days” is 178. It is 184 days for hockey players and 119 days for football players.
Note too that those “city days” are not just game days, but include travel and practice days. . . . Again, this greatly increases the amount taken.
-- Alan Stamm