DL Open Thread: Friday, July 9, 2021

Wanna Avoid Taxes? Buy Yourself A Sports Team.  Here’s how:

(LA Clippers’ owner Steve) Ballmer pays such a low rate, in part, because of a provision of the U.S. tax code. When someone buys a business, they’re often able to deduct almost the entire sale price against their income during the ensuing years. That allows them to pay less in taxes. The underlying logic is that the purchase price was composed of assets — buildings, equipment, patents and more — that degrade over time and should be counted as expenses.

But in few industries is that tax treatment more detached from economic reality than in professional sports. Teams’ most valuable assets, such as TV deals and player contracts, are virtually guaranteed to regenerate because sports franchises are essentially monopolies. There’s little risk that players will stop playing for Ballmer’s Clippers or that TV stations will stop airing their games. But Ballmer still gets to deduct the value of those assets over time, almost $2 billion in all, from his taxable income.

This allows Ballmer to perform a kind of financial magic trick. If he profits from the Clippers, he can — legally — inform the IRS that he is losing money, thus saving vast sums on his taxes. If the Clippers are unprofitable in a given year, he can tell the IRS he’s losing vastly more.

This is not some loophole that nobody foresaw. Dubya, who had been a part owner of the Texas Rangers at one point, signed it into law thanks to massive lobbying from Major League Baseball. And, of course, the heavily-lobbied Congress, passed it:

In an effort to stop the endless litigation, Congress inaugurated the modern era of amortization by simplifying the rules in 1993: Under the new regime, the purchaser of a business would be allowed, over the span of 15 years, to write off more types of intangible assets. This might have been welcome news for the sports business. But Congress explicitly excluded the industry from the law.

Following lobbying by Major League Baseball, in 2004, sports teams were granted the right to use this deduction as part of a tax bill signed by President George W. Bush, himself a former part owner of the Texas Rangers. Now, team owners could write off the price they paid not just for player contracts, but also a range of other items such as TV and radio contracts and even goodwill, an amorphous accounting concept that represents the value of a business’ reputation. Altogether, those assets typically amount to 90% or more of the price paid for a team.

That means when billionaires buy teams, the law allows them to treat almost all of what they bought, including assets that don’t lose value, as deteriorating over time. A team’s franchise rights, which never expire, automatically get treated like a pharmaceutical company’s patent on a blockbuster drug, which has a finite life span. In reality, the right to operate a franchise in one of the major leagues has in the last few decades been a license to print money: In the past two decades, the average value of basketball, football, baseball and hockey teams has grown by more than 500%.

Hey, it’s Friday. Take some time, read the entire piece. A window into the eternal unfairness of the Tax Code. And the multi-billionaires who profit from it.

Welcome To Texas, The ‘Crypto-Mining’ Capital Of The World.  When a Texas operation shuts down due to a power shortage–they get paid for it:

In the world of crypto mining, having all your computers shut down at once, and stay down for hours, as they did in June, sounds like a disaster. Crypto miners compete with one another the world over to generate the computer code that results in the production of a single bitcoin, and the algorithm that governs bitcoin’s production allows only 6.25 bitcoin to be produced every 10 minutes, among the perhaps 70,000 crypto mines that operate around the world. If you’re not able to generate the code, but your rivals can, you are out of luck.

But thanks to the way Texas power companies deal with large electricity customers like Whinstone, Harris’s bitcoin mine, one of the few owned by a publicly traded company, didn’t suffer. Instead, the state’s electricity operator, the Electric Reliability Council of Texas (ERCOT), began to pay Whinstone — for having agreed to quit buying power amid heightened demand.

That sort of arrangement has helped make the state one of the go-to locations for expanding crypto entrepreneurs the world over, despite its continued agonizing over power shortages. Indeed, Whinstone’s new owners are undertaking a major expansion of its facility outside Rockdale, with the intention of doubling its capacity. When fully developed, the crypto mine here is expected to require 750 megawatts of power — enough to power more than 150,000 Texas homes during peak demand.

The Christian Right Is In Decline.  It’s inexorable and inevitable:

But the evangelicals who thought they were about to take over America were destined for disappointment. On Thursday, P.R.R.I. released startling new polling data showing just how much ground the religious right has lost. P.R.R.I.’s 2020 Census of American Religion, based on a survey of nearly half a million people, shows a precipitous decline in the share of the population identifying as white evangelical, from 23 percent in 2006 to 14.5 percent last year. (As a category, “white evangelicals” isn’t a perfect proxy for the religious right, but the overlap is substantial.) In 2020, as in every year since 2013, the largest religious group in the United States was the religiously unaffiliated.

In addition to shrinking as a share of the population, white evangelicals were also the oldest religious group in the United States, with a median age of 56. “It’s not just that they are dying off, but it is that they’re losing younger members,” Jones told me. As the group has become older and smaller, Jones said, “a real visceral sense of loss of cultural dominance” has set in.

‘One Of The Greatest Memories…‘:  Trump’s painful yet delicious deposition in Trump University case.  I think this comment says it all:

“It’s the kind of thing you would see in a documentary on mental illness.”

Yep, Fox Is Creating A Weather Channel For Climate Deniers.  We’re doooomed, I tell ya’.

Biden To Issue Executive Order To Roll Back Anti-Competitive Practices.  Good, as far as it goes.  But unless Amazon is reined in, you’re allowing our most anti-competitive company to get away scot-free.

Mark Purnell’s Murder Conviction Overturned.  A classic case of injustice righted:

To make that assessment, the state’s highest court took the rare step of going back through the evidence in the police investigation. That included witness statements at trial, their prior statements to police, retracing how police gathered the evidence they presented against Purnell as well as considering evidence the jury never heard.

The Supreme Court justices considered that information in light of new evidence submitted by Purnell and his attorneys. That new evidence included one of the witnesses who helped convict Purnell entirely recant his statements about Purnell as well as other affidavits from those close to other witnesses casting doubt on those witnesses’ in-court testimonies.

What do you want to talk about?