We’ve all been getting very patriotic about the Davis Cup team this weekend with the PM sitting in the front row wearing his green and gold scarf, but just how patriotic are the boys when it comes to their tax arrangements.
“Our” Pat Rafter lives in Bermuda. Australia’s own Mark Woodforde spent much of his tennis career living in Monte Carlo, before setting up a ranch in California. The Poo, and his comrades Todd Woodbridge and Sandon Stolle live in the tennis and golf star ghetto that is Florida. Even Wayne Arthurs, that chronic first round loser, lives overseas. Only that little Ausssie battler Leyton Hewitt still calls Australia home, in Adelaide, presumably with his mum.
So what’s up with these blokes? Greed got the better of them? Don’t want to lend a hand to their future competitors at the Institute of Sport? Perhaps they’re conducting a mass protest about tax payer dollars being used to prop up private schools and the private health care system. Whatever it is, tax dollars have got something to do with it.
In Pat Rafter’s home town of Pembroke, Bermuda you don’t pay income tax. None at all. So while Our Pat gives generously to children’s charities, he doesn’t give much to Queensland schools, roads and hospitals. He only pays the Australian Tax Office a cut on the money he earns through Australian tournaments and Australian sponsors.
Like Bermuda, Mark Woodforde’s old home town of Monte Carlo is also a tax haven where personal income tax rates are zero. In the other Woody’s home state of Florida, the tax regime also suits Australian tennis players. In the U.S. the top marginal tax rate is 39 cents in the dollar, compared to 48 cents in the Australian dollar. The top Aussie rate also kicks in a hell of a lot earlier and the Aussie is only worth half the Greenback so if you’re earning plenty, it is much better to live in Florida than Australia, especially because in Florida there just happens to be no state taxes.
The player’s managers and financial advisers will tell you that they have to leave Australia to play on the international circuit. But this doesn’t explain why Leyton Hewitt can manage to live in Adelaide and Pat Rafter has to live in a tax haven in Bermuda. Or why golfers like Greg Norman, Craig Parry and Stuart Appleby live in Florida, while Wayne Grady and Mike Harwood live in Australia. Or why legends of tennis like Ross Case, Geoff Masters and Phil Dent could stay put and live and pay taxes in their own country.
For athletes playing team sports it makes sense when they move overseas. They have to live where their team is based. It’s less important for golfers and tennis players as they end up living out of hotel rooms when they play the circuit.
The Australian Sports Commission gives out $14 million worth of scholarships a year and gives out $28 million in grants. Most of that money goes to elite athletes. But many elite athletes are not contributing to these government funded sports institutes because they’re paying their taxes, if any at all, overseas.
Mark Phillipousis and Todd Woodbridge are two of the athletes who benefited from government funded scholarships at the Australian Institute of Sport, and now pay taxes to the U.S. government. They’ve both made millions from tennis, but aren’t required to put money back into the Institute of Sport. There’s no HECS style scheme for athletes who received sporting scholarships from the AIS.
So should we try and recoup the scholarship money of highly paid sports stars who move overseas? If we can’t do that we should at least make them play Davis Cup for their adopted nations. Imagine seeing Pat Rafter lead Bermuda in a Davis Cup Tie against Australia. At least the fans would make him pay.
* This article was first published last year in Strewth Magazine which we highly recommend.
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