NCPA - National Center for Policy Analysis

PLAY BALL! BUT NOT WITH TAXPAYER MONEY

April 7, 2010

The price of baseball has increased all across the Major Leagues because of the tax write-off (read: subsidy) that businesses get to treat clients and employees to ballgames, according to a recent New York Times op-ed. 

There are many reasons for the price explosion, but a critical factor has been the ability of businesses to write off tickets as entertainment expenses -- essentially a huge, and unnecessary, government subsidy, says the Times.  Consequently, these deductions have led to higher ticket prices: 

  • On the demand side, they have fueled competition for scarce seats, with business taxpayers bidding in part with dollars they save through the deductions.
  • While baseball parks built in the 1960s and before held as many as 56,000 seats, the modern trend is toward smaller-capacity parks, with a higher percentage of total space dedicated to skyboxes.
  • The new Yankee Stadium, the only major league park built since 2000 with more than 44,000 seats, has 3,000 fewer seats than its 1923 predecessor but almost three times as many skybox suites. 

There are a variety of reasons to oppose the subsidy, says the Times: 

  • The targeted tax breaks for luxury items pad the pockets of billionaire sports team owners.
  • They also give a discount to companies showing off their "generosity" to clients.
  • They also generally distort the economy. 

All at a cost to taxpayers, including those who aren't even baseball fans, says the Times. 

Source: Ilya Shapiro, "Play Ball! But Not With Taxpayer Money," Cato Institute, April 6, 2010. 

For Cato text:

http://www.cato-at-liberty.org/2010/04/06/play-ball-but-not-with-taxpayer-money/  

For NY Times text:

http://www.nytimes.com/2010/04/05/opinion/05schmalbeck.html  

 

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