LeBron James, NBA stars getting ‘legally’ screwed compared to team owners
LeBron James is making a boatload of money. That fact is something that basically everyone knows, given how he’s one of the most famous athletes on planet earth. But sports franchise owners like Steve Ballmer and Jeanie Buss are still richer than King James himself, while also reportedly finding loopholes to pay even less taxes–“legally” of course.
According to ProPublica’s bombshell report, LeBron James made a whopping $124 million back in 2018, which garnered a hefty tax sum of about $44.5 million or basically 35.9% of his total income. An average worker at the concession stand at Staples Center working two jobs made almost $45 thousand, which the government taxed for 14.1%.
Do you know at what rate Los Angeles Clippers owner Steve Ballmer was taxed for his nine-figure income figure? Just 12%. The Microsoft big shot who owns the Clippers and is best know for his huge arsenal of wacky celebrations is getting taxed a third of the rate LeBron James is. He’s also paying less in tax rate than the average worker, while earning basically 15,000 times more than them. The ProPublica report explains further, which provides a thorough explanation for this wild financial wrinkle.
Ballmer pays such a low rate, in part, because of a provision of the U.S. tax code. When someone buys a business, they’re often able to deduct almost the entire sale price against their income during the ensuing years. That allows them to pay less in taxes. The underlying logic is that the purchase price was composed of assets — buildings, equipment, patents and more — that degrade over time and should be counted as expenses.
This allows Ballmer to perform a kind of financial magic trick. If he profits from the Clippers, he can — legally — inform the IRS that he is losing money, thus saving vast sums on his taxes. If the Clippers are unprofitable in a given year, he can tell the IRS he’s losing vastly more.
So there you have it, folks. The key to paying less taxes is simply to own a sports team. LeBron James will probably go this route sometime after he retires ala Michael Jordan, but people like you and me will just have to be content with paying for tickets to fill rich people’s pockets even further. C’est la vie, my friends.