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from NewsLink, Vol. 5, No. 3, Spring 2001
Tax a moving Jeter!
The tax code for today's pro athletes can be a nightmare. Among other things, they have to pay state, and in some cases city, income taxes everywhere they play. Derek Jeter, who is scheduled to play nine games in Boston this year, will pay Massachusetts taxes on about one-sixteenth of his $15 million salary. On top of that, professional athletes must account for any appearance in which they receive money or goods, and every endorsement nickel that makes its way into their bank account. Sell an autograph? Gotta declare it. Take home a free television after an appearance at the latest electronic store to open? Write it down. It's all taxable income according to Uncle Sam.
Matthew Futterman, New Jersey Star-Ledger,
April 15, 2001.Lemon Meringue Risk Management
Circus clowns were told ... to take out custard pie insurance against the risk of being sued by spectators who fail to see the joke. “With an increasingly litigation-crazy public ... the ethics and legal implications of `splatting' and `sloshing' are expected to be hotly debated under the Big Top,” Clowns International said in a statement from its annual convention. Although no clown has yet been sued by the recipient of a face full of custard pie, the organization fears it may be just a matter of time.
Reuters by way of Yahoo, April 6, 2001.“Snail Mail” snuffed out on Saturday?
The large and still growing popularity of e-mail is one of the major reasons why the U.S. Postal Service is considering eliminating the delivery of mail on Saturday. The Postal Service is facing a loss of between $2 billion and $3 billion this year. Currently, Internet users send over ten billion non-spam e-mails per day, an International Data Corp. (IDC) study claims. That will increase to 35 billion by 2005, IDC predicts, and within five years there will be 1 billion e-mail accounts. The market research firm Cyber Dialogue reports that 73 million U.S. adults access e-mail at least once each month. That represents 94% of all U.S. Internet users. E-mail is also growing quickly in the business sector. For example, the electronic marketing firm 24/7 Media estimates it sent over six billion e-mails in 2000, a 300% increase from the year before.
E-Commerce Times, April 4, 2001.Smells like teen spirit
A nationwide survey of 546 students conducted by Junior Achievement reveals that 83% of young people think taxes are too high. The JA Interprise Poll on Personal Finance also asked teenagers if purchases made over the Internet should always be tax-free. Seventy-nine percent said yes, while another 13.6% said purchases should be tax-free for a limited time. The results indicate that today's young people might have more of a reason to care about current tax rates than many adults may think. Business Wire, April 13, 2001.
No option: Alternative Minimum Tax Nightmare
Like so many others in the high-tech world, Jeff Chou watched his millionaire dreams crumble along with the plunging stock market last year. But through it all, the 32-year-old hardware engineer never expected that he would have to endure a taxpayer nightmare for the rest of his life. Chou owes the IRS taxes on $6.5 million in paper profits he never saw after exercising Cisco Systems stock options last year. By tax deadline, Chou would have to come up with around $2.5 million to pay his state and federal income taxes. Even if he were to liquidate all his assets and hand them over to the IRS, he figures he'd still fall $700,000 short. “There's no chance I can pay the government back in my lifetime,” moaned Chou who now faces bankruptcy.
May Wong, Associated Press, April 12, 2001.NewsLink is the quarterly newsletter of the Beacon Hill Institute for Public Policy Research at Suffolk University. © 1996-2003. All rights reserved.
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