In Friday’s issue of The Boston Globe, a front page article entitled “Eye on ’13 tax bite, big earners seek to move up pay dates” opened with a discussion of Mike Napoli’s $39 million contract offer from the Boston Red Sox. According to the article, with a payday such as this, Napoli is a member of the tax bracket that may potentially see a rate hike of about 4.6% come January. In addition to Napoli, columnist Callum Borchers describes a number of athletes – or more specifically – athletic agents attempting to lessen their clients’ tax obligations in 2013 through a few interesting tactics (including having some of their 2013 wages turned into 2012 bonuses). And it’s not just a baseball issue, Borchers illustrates the same strategies used by players in the NBA and NFL as well in order to underscore the fact that “it is common practice for the rich to adjust their pay dates when tax increases loom,” (A17). Ok. But just which ‘rich’ is Borchers focusing on?
It is Borchers’ choice of which ‘high earners’ to include in the article that gives me pause. Let’s put this into perspective – Mr. Napoli’s salary from the Texas Rangers in 2012 was $9.4 million, so a 3-year $39 million contract with the Red Sox is nothing to sneeze at. However – and this is crucial – in the world of the truly wealthy, it’s also nothing much. Let’s be real, if the Koch brothers – estimated to be worth $31 billion each – lost $39 million, would they even notice? Indeed, in their September issue Forbes reported that for 2012 the “average net worth of a Forbes 400 member is a staggering $4.2 billion”, which is the highest average in history. This is not a collective number, this is the average worth of the 400 wealthiest individuals in America. In fact the collective worth is even more startling, as msnbc.com reported that “collectively, this group’s net worth is the equivalent of one-eighth of the entire U.S. economy, which stood at $13.56 trillion in real terms according to the latest government data”. $4.2 billion, $31 billion, $13 TRILLION…these are the numbers of the real ‘high earners’ according to the leading financial magazine, yet the Globe gives front page coverage to “high earners” earning…$39 million over 3 years? Really? In my opinion, focusing our attention on high earning athletes is a sleight of hand designed to trick our attention away from the real game & how it may be rigged.
So let’s play ball. When we are talking about the potential impact of a tax hike on the richest Americans we are not talking about athletes or movie stars, though they are often the face of celebrity and fortune. But that’s not just because they are good looking, rather it’s part of the game designed to focus our attention off those that are truly the biggest earners and also (according to many) the biggest policy impacters and political lobbyers. In fact, the richest Americans maintain their power largely by remaining invisible. Yet when the earnings of just one address – like 740 Park Avenue (which a recent documentary by Alex Gibney claims is “home to the highest concentration of billionaries in the United States”) – is equal to or greater than a large portion of America and yet they often pay less taxes, there is a big problem. But the more we are concerned with the Pitt-Jolies or Evan Longoria and his $100 million six-year contract, the less attention we pay to the people for whom $16.7 million annually is, truly, chump change – people who could buy and trade baseball teams the way kids trade baseball cards.
To talk about “high earners” and limit the conversation to star athletes is a problematic but clever move. Using a sports analogy we might say it’s like a pitcher about to attempt a pick off of a runner trying to steal second base. In the crowd we watch the position and movements of the pitcher, carefully designed to avoid a balk and – critically – drawing our attention to the lead off, our eyes glued on the runner hovering between first and second, while we ignore all the other players breezing into home plate.