LSU and Texas Fans Win the Tax Favoritism Trophy

We often hear that this year’s tax legislation was a victory for the American people and a defeat for special interests. Apparently purchasers of tickets to athletic events--football, primarily--at the University of Texas and Louisiana State University represent the people and not a special interest.

Buried in Title XVI of the tax bill, in section 1608, is a provision entitled “Treatment of Certain Amounts Paid To or For the Benefit of Certain Institutions of Higher Education.” While this title has a slightly suspicious odor, it is not until you decipher the actual text that you pick up the pungent smell of the pork barrel.

While the “certain institutions” are not named specifically, two are identified with long, complex descriptions. After extensive research, one discovers that the only two schools qualifying are Texas and LSU.

The “certain amounts” referred to are those given to these two universities which entitle the “donors” to “the right to seating or the right to purchase seating in an athletic stadium of such institution.” The “treatment” in effect is that you can write off the purchase of a football ticket as a charitable deduction. And the deduction is retroactive to Jan. 1, 1984.

Because any money paid for a ticket would, if it did not result in the “right to seating,” be a pure contribution to the university, the effect of the provision is to allow purchasers of Texas Longhorns and LSU Tigers football tickets (and possibly of basketball and baseball tickets, depending on how “athletic stadium” is interpreted) to deduct the cost of those tickets. Ticket purchasers at every other university, however, still must use after-tax dollars.

Despite the pompous and moral prattlings of the White House and Congress about fairness and reform, this provision is a sample of good old-fashioned mutual back-scratching to help powerful legislators’ favored special interests. There is no conceivable policy justification for giving special tax treatment to fans of Texas and LSU football. If there is a policy justification for using the tax laws to encourage purchasing football tickets, which seems doubtful, it should, at minimum, apply to every college.

To single out Texas, LSU and their football fans for new special favors (while many lose deductions for consumer interest, employee business expenses and retirement savings) makes a mockery of the legislative process and the constitutional guarantee of equal protection.

This provision--typical of many like it hidden in the “reform” bill--makes one realize the incredible gall of politicians when they somberly pronounce this measure as a victory for fairness and the people.

I would hope that some ticket buyer at another school or university, which does not enjoy such favored status, will file a lawsuit to have this facially irrational provision declared constitutionally infirm.