San Fernando Valley Congressman
"The American people are happy to help small businesses grow, but paying fines for multimillionaires to subsidize bad behavior should not be the responsibility of American taxpayers," Cardenas, a freshman Democrat, said in a letter to House colleagues seeking their support.
The Stop Penalizing Taxpayers for Sports Owners’ Fouls Act comes after Sterling, the owner of the
"When it's a $2.5-million fine, that's a significant write-off," Cardenas said in an interview in the Capitol. "I don't think this is a business investment."
The measure would amend the Internal Revenue Code to "disallow a deduction for any fine paid by an owner of a professional sports franchise." It would apply to fines imposed after Dec. 31, 2013.
It has no Republican co-sponsors, but Cardenas said he has just began talking to his colleagues about the bill.
Steven M. Rosenthal, senior fellow at the Tax Policy Center in Washington, called prospects for the legislation bleak.
"I think we are in the silly season. If we disallow deductions for payments that we do not like, where will we stop?" he said. The center is a joint venture between the Urban Institute and the
Last fall, bipartisan legislation was introduced in the Senate to prevent companies from taking tax deductions for some types of payments made to settle allegations of "illegal corporate behavior." That legislation has languished.
Cardenas' measure is likely to be referred to the House's tax-writing Ways and Means Committee.
Although the fine to Sterling drew Cardenas' attention to the issue, he said, "This isn't just about Don Sterling." Other sports team owners have been fined too, he said.
"Sterling’s $2.5-million fine compares to another NBA owner,
"Being fined for violating the rules of your league is not the same as a shop owner on Main Street paying to have a new sign hung in front of their business," Cardenas said in the letter. "One is a business expense, the other is a punishment."