Megastar Boxer May Leave Las Vegas to KO High Taxes
On the heels of pro golfer Phil Mickelson’s hints that high taxes in California could drive him to move out of state, is news that professional boxer Manny Pacquiao may KO the popular boxing venue of Las Vegas in favor of another country.
The other country? China.
It seems the boxing superstar, with an impressive array of international titles, is balking at the thought of losing nearly 40 percent of the millions he’ll earn for stepping into the ring against Juan Manuel Marquez.
A Vegas promoter has been trying to line up a highly anticipated fifth match between the two this at the MGM Grand, but acknowledged that the high tax rate Pacquiao would face will likely send the fight to a casino overseas.
“He says that he doesn’t want to fight in the United States because of the high taxes which I can hardly blame him,” promoter Bob Arum told ESPN recently. “You know, there’s a limit to what these guys wanna pay, you know, that’s almost 40 percent of his purse going for taxes, that’s a lot,” he said.
A Vegas fight would wrest around 39.6 percent of Pacquiao’s anticipated $25 million purse. Should Pacquiao opt to hold his bout in Macao, he’d reportedly earn about $20 million, but keep nearly all of it. And Singapore’s top tax rate is a reported 20 percent – half of the Vegas tab.
But it’s not all about Pacquiao or his own earning potential. Like the Mickelson scenario in California, a Pacquiao-Marquez fight outside the U.S. would KO the earning potential of the people living and working in Nevada. A 2008 article titled “The Economics of Boxing” cited a 2007 bout between boxing icon Oscar de la Hoya and then-undefeated star of the ring Floyd Mayweather, Jr. to explain how much more is at stake than just a boxer’s own winnings.
“The pay-per-view sales alone accounted for over $120 million in revenue, while a record live gate of $19 million, sponsorships, arena fees and other revenue streams brought the total to well over $150 million.”
P.S. – This fight was also at the MGM Grand in Las Vegas. Pacquiao’s promoter admits that leaving Las Vegas would cost him $10 million alone and half the pay-per-view sales.
But forget about those guys and their huge jackpots.
Think of all the people who worked that night in 2007: ushers, food-service workers, security, ticket-takers, taxi drivers, and the countless others in the workforce it takes to hold such an event. Should Pacquiao leave Las Vegas and move his fight overseas, he would effectively take with him a workday jackpot that would have been earned by hundreds of people and their families.
It’s like a good-sized small business being erased from the American economy.
Like Mickelson, Pacquiao has the ability and resources to do business and live where he wishes. Those left behind – those ticket-takers, concessionaires, ushers, etc – do not. Instead, the people who are less likely to afford a high tax bill to ‘pay for government’ are the ones who are forced to pay it when the Pacquiao’s and Mickelson’s of the world decide to leave.
What’s ironic in all of this is the fact that Pacquiao is no stranger to politics. He is an elected official in his home country of the Philippines, where he serves in that country’s House of Representatives. And he threw his heavyweight behind Democrat Senator Harry Reid (D-NV) and California Governor Jerry Brown, the very people who seem to think higher taxes will bring in more revenue to ‘run government’.
In this case though, Pacquiao’s actions speak louder than his political words. Realistically, Pacquiao has only a few more megawatt fights left in his career. If politicians are immune to the blows of high taxes in the boxing ring, perhaps it’s time for those left behind to throw some upset punches at the ballot box.
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