An own goal
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With the introduction of the 50% tax rate next year, this article in The Telegraph points out the effects on the Football Premier League – in a sport where players are very geographically mobile, and where tax laws are not harmonized, we could see an exodus of talent.
Whilst the article discusses some potential effects of the tax hike, a more interesting effect could be that rather than take-home pay falling, clubs may simply have to pay higher gross wages, in order to keep the take-home pay unchanged. Thus the result of the tax will be higher costs for clubs, which will be passed through to the consumer in the form of higher ticket prices, and so higher income taxes for higher salary players will end up meaning that it is the (much lower salaried) consumer that will ultimately lose out. This is particularly likely given the huge power that players command over their clubs, and the fact that they are particularly geographically mobile and footloose that they can demand higher gross wages; compounded by the very inelastic PED for the tickets.
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