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Why You Can Kinda Blame President Trump and His Tax Cuts for Your Favorite NFL Team Sucking

Posted on by Jason Bramwell

More than 30 years ago, President Trump tried to sabotage the NFL. Now you could say he’s indirectly sabotaging your favorite NFL team’s chances of making the playoffs.

But before we explain why, first a little background on why Trump hates the NFL.

In 1986, the NFL was sued by its biggest competitor, the United States Football League, which alleged that the NFL was a monopoly. The USFL team owners had voted to move their season from the spring to the fall in order to compete with the NFL, despite many of the three-year-old league’s teams struggling financially. But the USFL couldn’t get a national television contract from the three major TV networks at the time, and it blamed the NFL, which did have deals with CBS, NBC, and ABC. So the USFL filed an antitrust lawsuit against the NFL. Leading that charge was the owner of the USFL’s New Jersey Generals: Donald Trump.

Trump really wanted to own an NFL team, so he thought the best way to do that was to sue the NFL, and he predicted that the NFL would lose the lawsuit, have to pay the USFL hundreds of millions if not billions of dollars in damages, and would then offer to merge in the USFL’s teams. Then he’d be the owner of the NFL’s New Jersey Generals.

He was right about one thing: the NFL did lose the antitrust lawsuit. But the jury concluded that the USFL’s financial struggles were of its own doing, so instead of being awarded millions of dollars in damages, the USFL was awarded $1. Well, actually $3 because in antitrust cases, damages are tripled.

Trump’s dream of owning an NFL team died, and so did the USFL. Since then, Trump tried unsuccessfully to buy the New England Patriots in 1988 and the Buffalo Bills in 2014. But truth be told, the NFL wanted no part of Trump as a team owner.

So, Trump has gotten revenge on the NFL … sort of. And it has to do with the Tax Cuts and Jobs Act he signed into law late last year.

According to Bloomberg:

The 2017 law could put teams in states with high personal income tax rates at a disadvantage when negotiating with free agents thanks to new limits on deductions, including for state and local taxes, according to tax economist Matthias Petutschnig of the Vienna University of Economics and Business.

Petutschnig’s research into team performance over more than two decades shows that National Football League franchises based in high-tax states lost more games on average during the regular season compared to teams in low or no-tax states. That’s because of the NFL’s salary cap for teams, according to Petutschnig; if they have to give certain players more money to compensate for higher taxes, it reduces how much they pay other players and lowers the team’s overall talent level.

“The new tax law exacerbates my findings and makes it harder for high-tax teams to put together a high-quality roster,” Petutschnig said.

According to his research, which examined NFL regular seasons from 1994 to 2016, the three teams in high-tax California—Oakland Raiders, San Francisco 49ers, and San Diego Chargers (the Los Angeles Rams were still in St. Louis)—won three fewer games on average than teams like the Miami Dolphins and the Dallas Cowboys, which play in states (Florida and Texas) where no state income taxes are levied. A player on those teams “was always going to come out a whole lot better than somebody playing in New York,” Jerome Glickman, a director at Friedman LLP who works with professional athletes, told Bloomberg. “Now, it’s worse.”

Why? Because the TCJA set a $10,000 annual cap for the amount of state and local taxes that taxpayers can deduct on their federal tax returns, which is pocket change for star NFL players who live in states with high property taxes, like New York, New Jersey, and California. That SALT provision is set to expire in 2025.

NFL agent Joe Linta told Bloomberg that a free agent considering a California team compared to a team in Texas or Florida would need to make 10% to 12% more to compensate for his state tax bill. He added that the SALT cap is “a factor” in negotiations.

House Republicans recently passed legislation that would make the $10,000 limit on SALT deductions permanent, but the bill is expected to die in the Senate.

In addition, the TCJA eliminated the popular deduction for unreimbursed employee business expenses, which means football players are no longer allowed to write off union dues and fees for agents, public relations, business management, or off-season trainers, according to Bloomberg.

Joseph Criscuolo, a managing associate at accounting firm Drucker & Scaccetti who works with professional athletes, said that under the tax law, athletes “in the mid-range are going to break even,” with the law’s individual federal income rate cut compensating for lost deductions. But for the highest-paid athletes, the canning of deductions for unreimbursed expenses “is a big deal,” he said.

Under the old law, athletes could deduct those expenses if they exceeded 2 percent of their adjusted gross income.

So Raider Nation, don’t just point fingers at Jon Gruden for your team’s 1-5 start to the season, and for not re-signing star outside linebacker Khalil Mack; you should also kinda/sorta point fingers at President Trump and his tax overhaul, too.

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Wednesday Addams’ $180,000 Tax Trouble

Go figure, Christina Ricci has been hit with an IRS lien to the tune of $179,568.30 for unpaid 2008 taxes. Though the lien news seems to have taken her quite by surprise, Ricci’s rep told TMZ that she is taking “immediate action to address it in a responsible manner.”

That’s funny, I thought a responsible manner would have meant paying the IRS $179,568.30 before April 15th, 2009 when it was due but maybe that’s just me.


Oddly enough, if you’ve ever been hit with an IRS lien (hello, Nic Cage) you know that the Service doesn’t just one day decide to slap a lien on you without first attempting to give you a hint that the proverbial shit is preparing to hit the fan. Generally this comes in the form of correspondence (lots of it) indicating that there is an issue.

Helpful bunch that they are, the IRS will almost always work with tax delinquents as long as said delinquents return their letters and get in touch to say “Hey, sorry, totally forgot to give you that $180,000 that I owe you.” In the case of Christina Ricci, we’re pretty sure her IRS letters must have gotten lost in the fan mail and creepy stalker packages. Yeah, that must it.

Christina Ricci — Ya Got $179k Layin’ Around? [TMZ]

Illinois Tax Policy, Once Again, Fails to Impress

Known smartypants George Will took the state of Illinois to task over the weekend for their less-than friendly tax policy. He tells an anecdote of Tim Storm, a business owner that relocated his company to Beloit, Wisconsin from Rockton, Illinois which is a whopping five miles away. This was, at least in part, due to the state’s recently enacted “Amazon tax”:

Illinois, comprehensively misgoverned and ravenous for revenue, has enacted what has come to be called an “Amazon tax.” It requires Amazon and other online retailers to collect the state’s sales tax. Amazon and many other retailers responded by severing their connections with their Illinois affiliates.

Not only is GW all over Illinois’s decision to go after online retailers for sales tax, he also reminds everyone that the pols in the Land of Lincoln did a number on individual and corporate income tax rates:

In January, a lame-duck session of Illinois’ legislature — including 18 Democrats who were defeated in November — raised the personal income tax 67 percent and the corporate tax almost 50 percent. This and the increase — from 3 percent to 5 percent — in the tax on small businesses make Illinois, as the Wall Street Journal says, “one of the most expensive places in the world to conduct business.”

So as you can see, Illinois is on the ropes for its fiscal (mis)steps. Of course, Will isn’t the first person to call out the state for being a little tax happy, as Americans for Tax Reform was all over Illinois for this back in January. Of course, ATR managed to criticize the policy in a snarky Swede fashion as opposed to a bowtie-wearing polymathic diatribe. For obvious reasons, we’re partial to the former.

Working up a tax storm in Illinois [WaPo]

Franken’s Monster: State Taxes for the Traveling Employee

He’s good enough, he’s smart enough, and doggone it, the state revenue departments loved Al Franken — once he paid $70,000 in back taxes.

Like many celebrities, Mr. Franken took his act on the road, making a good living on gigs in various states. Unlike many celebrities, Franken ran for office, subjecting his tax life to unnatural scrutiny. It turned out that he hadn’t filed taxes in every state wher

$70,000 of back taxes paid to 17 states later, Mr. Franken squeaked into the U.S. Senate by the narrowest of margins.


Franken has a lot of company in going from state to state without paying all of his taxes (he also has a lot of company in dumping on his accountant to weasel out of the blame). It’s a lot of work, and a lot of expense, for a traveling worker to pay taxes in every state. Every state has its own tax rules, and preparing all those returns isn’t cheap. Unfortunately, current law can make you taxable in a state with as little as one day of work.

State taxes are a compliance nighmare for glamour professions like sports, entertainment, construction and auditing. That’s why the Multistate Tax Commission is working on model legislation that would exempt workers from state taxes if they work in a state for less than 20 days in a year. That is, unless they work in sports, entertainment or construction (perhaps the only known instance where auditors aren’t abused worse than other professionals). A bill going nowhere in Congress, the Mobile Workforce State Income Tax Fairness and Simplification Act, would would create a 30-day threshold, but similarly screw entertainers and athletes, but not construction workers.

This raises the obvious question: why do they want to screw the athletes and entertainers? Presumably the states all want to pick Taylor Swift’s pocket (understandably), but for every Taylor Swift there are hundreds of struggling young musicians trying to scrape by and make a name for themselves. Yet the tax law, in all its majesty, requires the same level of tax compliance for millionairess Taylor Swift and the wonderful, but surely less prosperous, Carrie Rodriguez.

Small businesses used to be able to blow off states they only visited for a brief time. That’s becoming a bad bet. Better and cheaper data mining software makes it easier each year for state revenuers to sniff out temporary presence. If there is any publicity for your visit, you leave a Google trail. If you don’t file in a state, the statute of limitations never runs there, and you can build up a painful multi-year liability. If they catch you after the statute of limitations for your home state runs out, you lose your credit on the home state return for taxes paid in the other state — meaning you pay tax on the same income in two states.

So what do you do if you are a small business? Pay attention to which states you are doing business in. Don’t assume they just won’t notice you. Discuss things with your tax preparer. If you have sinned, most states will work out a deal through your preparer to only collect for a few years, and maybe waive penalties, if you come forward before they catch you. And remember that if you live in a high tax state, like California, New York or Iowa, you should be able to get an offsetting refund on your home state return for non-resident state taxes on an amended return for open years.

Joe Kristan is a shareholder of Roth & Company, P.C. in Des Moines, Iowa, author of the Tax Update Blog and Going Concern contributor. You can see all of his posts for GC here.