Evening star., 1932-04-24

AN SLdnCly on Cne alerC lot
new sources of tax rev.
enue, it possibly should
have been expected that some
body eventually would suggest a
tax on receipts for public amuse-
mentS, but the inclusion of pro-
vision for taxing the receipts of
college and high school athletic
contests seems to have been en-
tirely an unlocked for develop
ment.
A great many of the colleges are
just realizing how much of blow to
their athletic and physical education
programs the present provision, if
finally enacted into law, may be.
The more one studies the farreach-
ing effects of the law now imposed the
more one is inclined to the opinion
that those responsible for drafting the
provision relating to college and high
school athletics do not realize how
much of burden and how totally un-
fair it would be. 1t is doubtful if any of
those who framed the measure know
Just to what extent the provision would
tax college athletics For many schools
the proposed tax on student tickets,
which are paid for by the year and
entitle the student to admission to all
contests, would be almost confiscatory,
and confscatory here is used to mean
in fact and not in theory.
Y EFT us take typical university, for
1Linstance. and see how the tax, as now
proposed, would work out in actual
application to next years program.
Take any university of 1000 students
as an example, which charges a fee of
$40 per student for the support of
athletics and gives in return admission
to all contests The average receipts
per contest, based on So for the year,
would be about 18 cents. The university
would have to pay, though, a tax based
on the cost of tickets to others not
holding the student ticket. 1t foot
ball ticket were sold to the public
for $3.50, the school would have to pay
to the Government 10 per cent tax,
or rs cents, for every student ticket
that entered the gate.
Carry this through the year for all
games. Suppose there are foot ball
games at a total cost of Sl2, lacrosse
games at a total cost OF $5, IL base
ball games at a cost of S12, boxing
meets at a cost OF SIS, IL basket ball
games at a cost of S12 and 20 fresh
man contests at cost of $40. This
would make a total for one outsiders
ticket for all the games exactly $50,
and this would be the basis on which
every student ticket would be taxed.
In other words, the university on each
ss1Gc1lt t-9ket would pay tax on $50
bit would actually receive only $40.
Ccl-cuuently of the $40 received from
e2-h student the university would have
TO pay the Government $6 in taxes.
r UT this is not all. There is tax
- c. 10 PR cent on all full price
tickets. Ans even that is not all,
as there is a 10 per cent sales tax on
all sports goods, and the purchase of
equipment, all of it sports goods, rep
resents perhaps at a minimum one
fourth of the income for athletics from
all sources.
Let us pursue this Just little fur
ther and give the actual application of
this tax as against total income for this
hypothetical university. And actually
this would not be far from right, al
though it would vary in different
schools according to the amount of
lIlc lees anu Vi
outside OF Yale, Harvard and very
few schools that depend on large public
receipts, the Illustration here would
apply very accurately.
TAKE this typical case. Suppose the
l. total revenue for athletics. the
total budget, is $4,000. This is
the sum it is to get for the support of
its physical education and athletic pro-
gram. Twenty thousand of this comes
from 1000 students at fee of SO each.
Twenty thousand more is represented
in its net income from public tickets
for foot ball and other games. On the
$4,000 from the public it would pay
tax of $4,000. On the $4,000 from
student tickets 1t would pay a tax OF
$4,000 Sc out of every $40 received
according to the schedule given in
foregoing paragraph.
Now, in addition to the above taxes,
let us suppose that the school spends
one fourth its total income in equip
ment for its play program and for its
intercollegiate athletic teams. This
means that $4,000 of its $4,000 income
goes for sports goods and is subject to
another 10 per cent tax, because the 10
per cent sales tax, would be passed on
for the universities and college and high
schools to pay.
Nov sum up the result for the year
IN on a total income Of $4,000. On
one part of this income there is a
tax of $4,000, on another part a tax of
$4,000, and on another a tax of $1,000,
which makes a total of 5000 out Of
$4,000 available to be taken by the
Government in taxes, or about 37l2 per
cent. What the answer would be no
one knows but certainly programs
would be curtailed to just that extent.
OF course, there are some colleges in
which the tax would not be such bur-
den, but there are some in which it
probably would be worse.
In many high schools 1t would spell
disaster. Suppose Central, for in1tance.
plays Episcopal High School next Fall
in a foot bal game in the Central Sta
dun. Suppose 1000 Central students
attend on their athletic association
tickets sold to them at a nominal cost
Fer game. Each Of these 1000 tickets
will be taxed at the full admission
price to outsiders. If the admission is
50 cents, or tax of SlCO. Suppose
C. Q tex to b. paid On 1000 tickets at
50 ceHts or a tax Of S100. Suppose
that 100 Cut~iGe,s attend the game at
50 cen 8 each on which a tax Of $40
would haze to be pad. This would
rasa an actual tax CT Sll0. to BE- paid
T.. Ih~ r.cGet-, Will the total cash re-
c-~D-s would be Cnly $50.
IT is difficult to believe that this re-
SUI. either in the case Of the uni
veIslty or the high school, is what
Congress wants or what it intended
when 1t framed the tax law now be-
fore the Senate Finance Committee
h. lad
and high schools, as in the case of a
sales tax on sports goods being passed
on TO them, should pass the burden on
TO the people who buy tickets or the
students who use student tickets. but
under present conditions in the COL
leges and high schools that cannot be
done. Except in the cese of a very