Take Me out to the Ball Game, But should the Crowd's Taxes Pay for It‪?‬

Due to the recent openings of the billion-dollar Yankee Stadium and Cowboys Stadium, the public financing of new stadiums with tax-exempt bonds has become a major issue, attracting the attention of Congress, local governments, the media, and many sports fans. This article presents a complete overview of the issue of publicly financed stadiums and offers a solution to a problem that has caused the federal treasury to forgo billions of dollars of tax revenue and burdened millions of citizens with unnecessary state and local taxes. First, this article presents a brief history of stadiums and the legislative evolution of the exclusion from gross income of the interest of tax-exempt bonds. This article then discusses the current mechanics of how certain bonds are federally tax-exempt and describes the many taxes that local governments use to finance such instruments. These local taxes include sales tax increases, hotel and rent-a-car taxes, sin taxes, and business taxes. This article then presents the most common reasons given by proponents of new stadiums that are financed with these tax-exempt bonds. Next, the article presents justifications why stadiums should not be financed on tax policy grounds. This article also explains reasons against public financing that have emerged because of the current lackluster economy including the limited public use of new publicly financed stadiums and the fleeting consumer interest in new stadiums in general.