Earlier this week, a state lawmaker added another wrinkle to the continuing debate over Name, Image, and Likeness (NIL) issues in college sports. State Rep. Joe Lovvorn (R-Auburn) filed a bill in the Alabama Legislature that would exempt any compensation earned by student-athletes through the use of their NIL from the state’s individual income tax.
According to those supporting the “Competitive Edge NIL Tax Cut Act,” it’s about fairness. It’s just not fair that some universities in different states can recruit players by telling them they don’t have to pay a certain tax. They fear that states like Florida and Tennessee will now have an unfair advantage because they don’t have a state income tax.
RELATED: State Rep. Joe Lovvorn files bill to make NIL earnings tax-free for college athletes
“One thing has become clear over the last four years in college sports: the teams that best utilize NIL will be the teams that compete for championships,” said State Rep. Chris Blackshear (R-Phenix City). “Recruiting top athletes has become similar to attracting top businesses; you need to offer the best facilities, incentives, and opportunities for success. This legislation gives Alabama’s colleges and universities another useful tool to best represent our state on the national stage.”
This is a terrible idea. While I understand the argument, there is a much better option. Get rid of the state income tax for everyone.
I know some of the responses I get will tell me that Alabama already has a low tax burden because of less taxes in other areas. Fine. Good. Then make that same argument to the athletes. If you can’t, then it’s just not a good argument.
This approach goes way beyond NIL. Often Alabama and other states will give special tax breaks or subsidies to big businesses they want to relocate to the Yellowhammer State. Lawmakers realize that if they don’t offer those special benefits, they might lose out to other states that do. We need to break this cycle because in many cases taxpayers are getting the bad end of the deal.
An example of this is the current obsession is governments wanting to subsidize major sports stadiums. A 2022 study however shows that, “First, and perhaps most important, nearly all empirical studies find little to no tangible impacts of sports teams and facilities on local economic activity, and the level of venue subsidies typically provided far exceeds any observed economic benefits. In total, the deep agreement in research findings demonstrates that sports venues are not an appropriate channel for local economic [development].”
Another example of this is how the Legislature has responded to taxes and fees in ABC stores. Instead of abolishing the stores, allowing private companies to sell the alcohol, lawmakers thought it was a better idea to RAISE taxes on stuff sold in the government run liquor stores. That is the EXACT opposite of what they should have done.
So, how do states like Alabama compete? By creating a low-tax, low-regulation, business-friendly environment for everyone. That way rich and middle class individuals can succeed. That way big and small businesses can succeed. That way government can remain small and liberty can remain strong.
It’s simple. If you don’t like the state income tax for athletes, then abolish it for everyone.
Yaffee is a contributing writer to Yellowhammer News and hosts “The Yaffee Program” weekdays 9-11 a.m. on WVNN. You can follow him on X @Yaffee
