The Congressional Budget Office, eager for new sources of income, is considering taxation options for the nation’s collegiate athletic franchises, the Economist reports. Among the proposals are curtailing deductions for charitable donations to college sports programs; limiting tax-exempt bonds; and, most drastically, stripping the programs of their traditional tax-exempt status. But only the first idea will produce any real revenue.
Because donations are usually made by hardcore fans—and tied to preferential treatment—a tax will likely not result in decline of season-ticket buyers and thus help government coffers. But though college athletics do pull in millions of dollars, each school’s share is small, and many programs run at a loss. Forcing schools to pony up for their sports income may produce less than the government expects.