This is surprising. It’s not like the NFL is underpinned by cronyism and general shadiness or anything.
The tax reform bill unveiled this week by House Republicans would do away with the federal tax exemption for municipal bonds, commonly claimed by states and cities to subsidize the construction of stadiums.
The National Football League is gearing up big time to lobby against it, The Wall Street Journal reported this week.
Municipal bonds were made tax exempt in 1986 as a way to encourage investors to buy them at lower interest rates, saving cities money when they need to build new infrastructure or make expensive repairs. While the bonds are designed for building roads, sewer systems, and schools, cities have issued more than $13 billion in untaxed bonds for stadium projects since 2000, according to a recent Brookings Institute estimate.
There’s bipartisan support for directing the exemption specifically for public infrastructure, rather than multi-billion dollar playgrounds for multi-millionaire athletes and billionaire franchise owners. Sens. Cory Booker (D–N.J.) and James Lankford (R–Okla.) in June introduced an independent piece of legislation to prohibit local officials from using municipal bonds for stadium projects.
If that prohibition becomes law—either on its own or as part of a revamped federal tax code—those “unseen subsidies” would go away and the cost of those projects would increase. So, too, would public opposition to spending public money on stadiums.
A couple things must be noted. Generally tax breaks are a good thing. Though they can be crony if one company gets a break and another doesn’t, for instance. And tax breaks aren’t “subsidies”. Subsidies are paid by tax payers. Breaks allow people to keep their money, which generally should be the goal. Tax free municipal bonds are good things generally in our estimation. Better to float a bond than raise taxes.
However we are not talking about roads, or even a school here. We are talking about stadiums for private sports teams. And that is an important difference.