Last week, in a move that has been building for over a decade, the National Collegiate Athletic Association (NCAA) has finally allowed its student athletes to benefit from their likenesses. To be clear, they are not allowing players to be paid by the colleges they represent, but this will potentially allow college players to sign endorsement deals, get paid for autograph sessions, and even get a cut of video game sales that portray the players.
In the past, the NCAA has been resistant to allow for their athletes to be paid, as it would upset the amateur aspect of the sports they operate. If players were allowed to be paid, then the schools with the highest budgets will be able to get the top players. It may also affect the “student” aspect of the game. If the players are paid employees there is no real reason for them to take academics seriously. However, the truth is that highly recruited athletes are paid under the table and in extreme secrecy by the top schools, and the top athletes (i.e., the ones who have the potential to play professionally) tend to not be all that interested in their academic future to begin with. There are several documentaries that highlight this further, including Schooled: The Price of College Sports, and HBO’s Student Athlete.
The point is that those students who have their future in professional athletics won’t be bothered with academics, whereas the students with no real professional options won’t be likely to dismiss their classes due to their small income for playing sports. In order to allow the student athletes the ability to at least earn money from their likeness at least is a step in the right direction for the NCAA. The only real advantage the larger schools may see from this is the potential for exposure for better players, an advantage that definitely already exists, only now there may be tangible dollars attached to it. In other words, exposure used to translate into elite athletes getting more notoriety when it comes to draft status. Now, in addition to the scouts, the exposure may allow for larger income.
This decision is a win no matter on which side of the aisle you may fall. If you are a Liberal you are celebrating the unpaid employee now able to make some money from the enormously lucrative industry they support. If you are a Conservative you are cheering a free-market barrier being removed. However, if you are Senator Richard Burr (R-NC), you are somehow dismayed at this news. Burr decided to use this news to introduce legislation that will tax the scholarships of student athletes who may now earn an income. In a tweet, Burr stated that “If college athletes are going to make money off their likenesses while in school, their scholarships should be treated like income. I’ll be introducing legislation that subjects scholarships given to athletes who choose to ‘cash in’ to income taxes.”
There are several fallacies that need to be corrected here. Firstly, any scholarship dollar that is not used for tuition or books is already taxable. So tuition dollars spent on room and board is not exempt. Secondly, the money these athletes would be earning from their likeness will also be taxed. In this case, the government will be gaining those tax dollars, which previously have been shared by the NCAA and the schools, which almost entirely are not-for-profit entities, and are taxed much differently than individuals. The federal government already gains from this deal.
This move by Burr is extremely backward, as he voted for the Trump tax cuts in 2017. It would follow reason that he isn’t a fan of higher taxes. A move like this is usually reserved for the far-left wing of the Democratic Party, who have historically viewed higher income and lower taxes as reason to vilify. A classic example was Representative Alexandria Ocasio-Cortez’s (D-NY) crusade against Amazon when they were trying to move their headquarters to Queens earlier this year. The freshman congresswoman couldn’t stand the notion that New York was, in her opinion, giving Amazon free money to build their headquarters in New York. Ocasio-Cortez ignored the fact that the tax breaks weren’t going to cost New York money, rather the city and state wouldn’t be collecting extra revenue. Additionally, the employees would still have to pay taxes, as well as Amazon itself when the initial deal ran out. But that’s not how Ocasio-Cortez saw it. She believed that any profits turned by a business must be taxed at the highest rate possible because those businesses do not deserve (and in some cases they should not even be allowed) to generate those dollars in the first place.
This is the same philosophy Richard Burr is adopting today. College athletes do not deserve the scholarship and the ability to make money off their likeness. Giving them that ability is past what they give back to society. Therefore we must tax not only the new income they will be receiving but the scholarship that allowed them that ability in the first place. My question for Senator Burr is if a student paid their own tuition in college without a scholarship, and then earned money off their likeness, should that income be tax free? After all, the student didn’t gain any publicity as the result of a scholarship, so if we are to follow your backward logic, any income earned through the likeness would be completely off the merit of the student, so no tax should be assessed on it. If you were being honest, Senator Burr, that logic would follow the whole way through. So are you an honest man, or like always is Burr all about the Hamiltons?
Izzo Zwiren is the host of The Jewish Living Podcast, where he and his guests delve into any and all areas of Orthodox Judaism.