Tax Docket

From Forbes, Did Tax Ploy Help Saints Win Super Bowl?

In a just-filed U.S. Tax Court lawsuit, the partnership owning the Saints acknowledges that it didn’t treat an $8.5 million annual payment from the state of Louisiana as income and therefore didn’t pay taxes on the sum. Rather, the team said the money was an addition to “working capital” and a nontaxable transaction.

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According to the lawsuit, the $8.5 million was one of a series of “inducement payments” starting in 2001 for 10 years to keep the National Football League team in New Orleans. The lawsuit says, the money was to be used, among other things, to “acquire additional and higher-priced player contacts” to make the team “more competitive in the NFL.”

A recent Tax Foundation publication, States Vary in Distribution of Who Bears the Burden of Federal Income Taxes, analyzes the distribution of income and federal income taxes by income group of each state:

Connecticut by far has the most progressive distribution of federal income taxes. Taxpayers earning under $50,000 earned 13 percent of the AGI in the state, but paid 5 percent of the federal income taxes paid by all taxpayers in the state. By contrast, taxpayers earning over $200,000 earned 44 percent of the AGI, but paid 66 percent of the income taxes.

New York has the second most progressive distribution of federal income taxes. Taxpayers earning more than $200,000 earned 40 percent of the state’s AGI but paid 63 percent of the state’s federal income taxes. Indeed, they paid three times as much in federal income taxes as every taxpayer earning under $100,000 paid combined.

The other states in which taxpayers earning over $200,000 paid a greater share of the state’s federal tax burden than the national average include: New Jersey (58 percent); Texas (57 percent); Florida (56 percent); Massachusetts (56 percent); Wyoming (56 percent); California (55 percent); Illinois (54 percent); and Louisiana (53 percent).

The article includes tables for each state displaying the distribution of income and federal income taxes by income group for each state. The tables also show the effective tax rate-or share of income paid in taxes-for each income group.