April 8, 2013

NCAA Tax Subsidies Are the Real 'March Madness'

Matthew D. Mitchell

Senior Research Fellow

Christopher Koopman

Senior Affiliated Scholar
Summary

Not everyone was able to attend this year's NCAA Men's basketball tournament in person, but a lot of taxpayers have helped pay for tickets to the games and might not even realize it.

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Not everyone was able to attend this year's NCAA Men's basketball tournament in person, but a lot of taxpayers have helped pay for tickets to the games and might not even realize it.

As the Madness of March winds down with this week's championship games, visions of lucrative professional careers dance in the heads of talented young athletes around the country. Scouts, coaches and owners have their own visions, for any one of these young talents could be the next Kobe or LeBron.

And that makes each player a potential ticket to millions of dollars in public subsidies. Taxpayers, however, should be envisioning a loss; these deals are typically as wasteful as they are scandalous.

The publicly-subsidized exploits of professional teams are well known. But now amateur sports are getting in on the game. Texas, for example, uses a taxpayer-supported trust fund to channel subsidies to various sporting events such as the NCAA's Final Four. Not to be outdone, Indiana has a law on the books exempting the NCAA from state taxes and county admissions taxes for hosting a Final Four in Marion County (Indianapolis).

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