A group of House Democrats wants to make sure that Los Angeles Clippers owner Donald Sterling has to pay taxes on the $2.5 million fine the NBA assessed him for using racially charged language.
Rep. Tony Cárdenas (D-Calif.) and several other Democrats proposed legislation that would force all owners of professional sports teams to pay taxes on any league fines they face. Under current law, these owners can deduct league fines from their income taxes.
Clippers owner Donald Sterling: Disgraced, banned, fined and now...taxed? (AP/Danny Moloshok)
Cárdenas said his bill is needed because the ability of people like Sterling to avoid taxes on these fines means taxpayers are being cheated.
“Right now, multi-millionaire owners get a tax break for egregious behavior, a tax burden shared by all Americans,” Cárdenas said in an announcement of his bill. “This loophole is unacceptable. My legislation will close the loophole, ensuring that these owners are the only people who bear financial accountability for their behavior.”
Earlier this week, the NBA imposed the fine and a lifetime ban on Sterling, which will prevent him from attending his own team’s practices and games. The NBA is also seeking to force Sterling to sell the team to another owner – Oprah Winfrey is reportedly interested in buying the team.
Sterling was caught on tape urging his girlfriend not to associate with black people and not to bring them to Clippers games.
While the Democratic bill was clearly prompted by the NBA’s decision on Sterling, Cárdenas said taxpayers are losing out on revenue from other fines that team owners can deduct from their tax bill. He said Dallas Mavericks owner Mark Cuban has been fined nearly $2 million during his career, and said owners of professional football teams also get to escape paying taxes on league fines.
“Being fined for violating the rules of your league is NOT the same as a shop owner on Main Street paying to have a new sign hung in front of their business,” said Cárdenas. “One is a business expense, the other is a punishment. The American people are happy to help small businesses grow, but paying fines for multi-millionaires, subsidizing bad behavior, should not be the responsibility of American taxpayers.”
Under his bill, H.R. 4544, team owners could not write off any fine that was incurred in 2014 or later. Co-sponsors of his bill are Reps. Joe Garcia (D-Fla.), Raul Grijalva (D-Ariz.), Grace Napolitano (D-Calif.), Raul Ruiz (D-Calif.), Bobby Rush (D-Ill.), and Juan Vargas (D-Calif.).