Nov 24, 2014
Ex-CEO of Microsoft Steve Ballmer would make a lot of money through only tax breaks by operating a basketball team, the Los Angeles Clippers. Ballmer bought the Clippers from Donald Sterling last August, after Sterling’s racist behavior, ongoing for decades, was finally widely publicized. Ballmer paid two billion dollars for the Clippers, a record for a purchase of a basketball team. At the time, many thought he paid too dearly for a team, since the payment cannot be recovered through ticket sales or broadcast and advertisement revenue.
But it turns out Ballmer is an ultimate schemer – like many other businessmen who use their capitalist system to their advantage. He will recover close to one billion dollars over 15 years by using a tax break related to depreciation of capital assets.
This tax code scheme is a brain-child of another businessman, Bill Veeck, a former owner of baseball teams the Cleveland Indians, St. Louis Browns and Chicago White Sox. According to this tax code interpretation, as rather colorfully explained by a Stanford professor of economics, “When you buy a bull for the purpose of generating calves, that is a depreciable asset. Bill appealed to the IRS that buying a bull is a whole lot like buying a baseball player.” And he got the tax break!
Indeed, very brilliant! For a rich man, sports players, like any worker, are no different than farm animals. Don’t take it personal.