It should come as no surprise to hear that our massively wealthy footballers are dodging their tax obligations. It fits their profile as super-rich, spoilt and immature young men lacking in social conscience. What is surprising is the scale, with around 40 players under scrutiny. At least the Australian Taxation Office is neither intimidated nor awe-struck and so is able to mount a credible investigation into the rorting.
With annual incomes of up to a million dollars a year (averaging around $200K), Australian Rules footballers are amongst the most highly-paid members of our community. They are also, in a sense, emotionally-retarded, with leading psychologists describing them as possessing an "exaggerated sense of entitlement and diminished sense of responsibility and empathy". It's to be expected that many will seek to hoard their absurd wealth to the detriment of the rest of the community.
Just a couple of years ago, players were under scrutiny for employing mechanisms like side payments, front companies and payments to spouses for the purposes of getting around the salary cap. These cosy arrangement also had the neat side-effect of hiding income from the taxman. Even earlier, as AFL player salaries really started to take off, the Tax Office launched an inquiry into their affairs, especially relating to dodgy work deductions. This ultimately lead to a handy guide for clubs to manage player tax affairs.
Now, the concerns are around the failure to supply tax returns relating to personal income and business initiatives, and their rights to deduct agent fees (soon to be contested in court). According to Tax office deputy commissioner Shane Reardon:
"There's no doubt about that (prosecution), if you have a look at the number of prosecutions we have already done of all individual taxpayers.
"We offer them the opportunity to comply, but we will escalate through to prosecution."
Tax dodgers face fines of up to $5500, plus a year's jail, if they ignore lodging their returns by a court-imposed date.
Convictions are normally recorded for the charges and fines of up to $2200 for the first offence.
The Players' Association said a conviction would not stop a player from taking to the field. (The Herald Sun, 4/4/05)
I hope the penalties ramp up a little - the conviction won't stop footballers playing, and the fine is roughly what they make in a week!
More insidious is the realisation that very few footballers have the financial nous to structure their tax affairs. Hell, given their low standards of education I doubt that many of them could use BPay to pay a phone bill! (For example, Campbell Brown's efforts to operate an ATM saw him end up in court.) So who's helping these greedy but dim-witted players design and implement their tax dodges?
Still, we can take some solace in knowing that it's the Canberra-based ATO heading up the inquiry; frankly, I don't trust the Victorian Police to investigate claims against footballers. (More disturbingly, it seems our top detective is also skeptical.)
It's unlikely that players will come around to the realisation that paying taxes is the price of civilisation. Let's face it: very few would have benefited from universities, museums, welfare, the ABC and public health, whereas the legal system is a constant thorn in their side. Instead, we'll have to trust in continued media and regulator scrutiny of their huge incomes.
In addition to Dipper getting pinged for tax offences, former player (now one of those "self-indulgent" commentators on Fox Footy's ironically-named Winners program) Matthew Campbell has also been caught out dodging his obligations.
The Age Diary (17/8/2006) is reporting that Campbell was taken to court for failing to lodge four tax returns. "He was convicted, fined $300 on each charge and ordered to pay $139 costs." That's a good start from the Tax Office, but I hope they go after current players on million dollar contracts, not just washed-up ex-footballers on the bones of their bum.
Citations: The Herald Sun, 4/4/05
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