Scoring with Low Taxes

Kevin Hassett pointed out an interesting finding (not online) in the June 20 National Review:

At issue is the “Beckham law” that was enacted on June 10, 2005. Spain, in an effort to lure high-priced athletes, artists, and executives, passed a law that allowed these individuals to reside in Spain and pay a low flat tax of just 24 percent. Soccer star David Beckham was one of the first to take advantage of the law, hence its name. …
A new study published by the National Bureau of Economic Research suggests that the link between taxes and soccer performance is more than just a coincidence. Economists Henrik Kleven, Camille Landais, and Emmanuel Saez gathered data on club performance in the top leagues of 14 European countries going back to 1980, and explored the extent top which changes in tax rates explain player mobility, and the extent to which player mobility explained performance.

They found that countries that allow professional soccer players to keep more of their pay do better. More local stars stay, and more foreign stars immigrate.
As any sports fan might observe, the effect is diluted when the field is narrower — say with World Cup teams or American professional clubs. Part of the reason for the correlation of low taxes and good soccer players is that teams in higher-tax areas have to pay more in salary to be competitive as employers, which leaves less money to pay players farther down the lists.

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Warrington Faust
Warrington Faust
10 years ago

Implicit in any goverment scheme to lower taxes, is the admission that taxes are too high.

Russ
Russ
10 years ago

Sounds great. Say, how’s Spain’s economy been doing since that law was enacted? Must be booming, right?
http://www.indexmundi.com/g/g.aspx?c=sp&v=66
Not to mention that the effective tax rate for millionaires in the US is considerably less, which is why our soccer league is tops over those crazy European leagues, right?
Olé, olé , olé, olé!

Russ
Russ
10 years ago

Implicit in any goverment scheme to cut services, is the admission that taxes are too low.
If you keep repeating it, it makes it true!

Dan
Dan
10 years ago

If Russ ever made an argument that didn’t suffer from textbook logical fallacies, I would be amazed. The sad part is he considers himself some sort of super-logical engineer. Almost every post of his misses the point.

Russ
Russ
10 years ago

Let’s give Dan the benefit of the doubt and assume for the sake of argument he was talking about quid hoc ergo propter hoc. I’d be inclined to agree with him, but what does that say about the premise above that “the link between taxes and soccer performance is more than just a coincidence?”
I’ve presented just as much evidence that tax cuts for soccer stars caused the collapse of the Spanish economy as Justin has that there is a connection between taxes and of all things, fútbol.

Warrington Faust
Warrington Faust
10 years ago

Posted by Russ
“Implicit in any goverment scheme to cut services, is the admission that taxes are too low.
If you keep repeating it, it makes it true! ”
While the quaotation, to be correct, should read “taxes are too high”, it is logically true, without repitition.
If taxes were low enough to be competitive, why would tax cuts be advantageous?
As to your paraphrase, it would only be correct if it could be proved that the public was prepared to accept any level of taxation, in exchange for services which they might not desire.

Russ
Russ
10 years ago

As to your paraphrase, it would only be correct if it could be proved that the public was prepared to accept any level of taxation, in exchange for services which they might not desire.

It’s actually quite disturbing to read this kind of thing in a democracy. It’s an example of the selective populism that characterizes much of the Teapublican movement of late and of neofascist movements historically (see Eco’s “Eternal Fascism: Fourteen Ways of Looking at a Blackshirt”).

Warrington Faust
Warrington Faust
10 years ago

Russ writes:
“It’s actually quite disturbing to read this kind of thing in a democracy.”
A statement like this requires explication as to why it should be “disturbing”. Instead we get poor analogies disguising what some might call “name calling”.

Russ
Russ
10 years ago

I’ve written about it elsewhere and Eco explains it fairly well.
As for naming calling, I think it’s quite a different thing to attack you personally than to simply comment on my reaction/concern about something you wrote. Invariable folks over here will equate the two anyway to justify outright vulgarity but fair enough.

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