- Jock tax
In the
United States , the jock tax is the colloquially namedincome tax levied against visitors to a city or state who earn money in that jurisdiction. Since a state cannot afford to track the many individuals who do business on an itinerant basis, the ones targeted are usually very wealthy and high profile, namely professional athletes. Not only are the working schedules of famous sports players public, so are their salaries. The state can compute and collect the amount with very little investment of time and effort.In depth
The following is an in-depth analysis of modern day examples and criticisms of the jock tax.
Example
News broke when
Major League Baseball player Alex "A-Rod" Rodriguez signed the largest contract in American sports history, a 10-year contract worth an astounding $252 million. The tax collecting authorities of other states were notified alongside the public, and would separately demand that A-Rod's employer withhold the tax due from his salary and remit it to each of them. Even though Texas, the state in which A-Rod's team the Texas Rangers resided, did not have an income tax, he still had to pay the various state income taxes applied to each away game in each location. It is estimated that A-Rod pays $520,000 a year for state income taxes outside his own state.Criticism of the "jock tax"
In
2003 , theTax Foundation conducted a study on the jock tax. It concluded that the tax is:
*Poorly targeted
*Arbitrarily enforced
*Unrealistically burdensomeAccording to the foundation, the jock tax "forces traveling professionals to file potentially dozens of state and local income tax returns annually." The foundation argues that the jock tax is poor tax policy.ee also
*
Taxation in the United States Further reading
*"West Federal Taxation: Individual Income Taxes, 2005 Edition", [http://www.swlearning.com/swhome.html Thomson South-Western] .
External links
* [http://www.taxfoundation.org/research/topic/1.html Tax Foundation page on jock taxes]
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