First we have Wayne Swan promising a Robin Hood budget which will take from the rich and give to the poor. Then, almost simultaneously we have elite sportsmen in Australian football, rugby league, rugby union, cricket, swimming, netball and basketball demanding a tax break.
I don’t like their chances. Talk about bad timing.
According to the radio interview I heard this morning the argument is that the breaks are necessary to stop these sportsmen and women going overseas where salaries can be packaged to attract a much lower rate of taxation. My heart bleeds for them. Even in a short career these sort of people earn as much as most of their contemporaries earn in an entire lifetime, so why should they expect their contemporaries to pay higher taxes so they can pay lower?
In truth, this looks more like the sporting clubs trying a dummy pass in the hope of scoring a subsidy from the government in disguise. When you package a salary, the ultimate consideration is after-tax income. To give sportsmen the same after-tax income in Australia that the same sportsmen can get overseas at a lower tax rate, all you have to do is increase their before-tax domestic income until their after-tax income reaches the overseas equivalent figure.
What the clubs are conceding is that they can’t match the incomes being paid overseas. It probably has more to do with the scale that access to larger markets gives overseas clubs, than the tax system. And would it really stop the talent drain in some sports? If you were a soccer player, wouldn’t you rather be fronting for AC Milan than the Queensland Roar, even if they paid less _and_ the tax rate was higher? You could come back and play for The Roar in your semi-retirement. And in others, well, what exactly is the overseas market like for AFL players?