Pacquiao Wins, Uncle Sam Loses The Filipino champ says tax rates matter. The scorecard is in from boxings Clash in Cotai this weekend in Macau. In what may have been the final fight of his career, Filipino champ Manny Pacquiao won a unanimous decision over American Brandon Rios. The other winner was Macau, which gained prestige on the global sports and entertainment scene. The biggest loser? That would be Uncle Sam, thanks to U.S. tax rates that push business overseas and hamper the economy in Las Vegas and beyond. Mr. Pacquiaos previous 14 fights were in the U.S., but this time the former eight-division world champion specifically requested not to fight there. His stated reason: Americas top federal marginal tax rate of 39.6%. It all comes down to m-o-n-e-y, says promoter Bob Arum. Manny can go back to Las Vegas and make $25 million, but how much of it will he end up with—$15 million? Since 2006 the Pac-Man had fought only in Nevada and Texas, where there are no state income taxes. This year new and higher federal rates made any U.S. site a no-go, said Mr. Pacquiaos financial adviser Michael Koncz in February. Macau has a top tax rate of 12%. The Pacquiao camp says his purse is a guaranteed $18 million, plus a share of pay-per-view revenues that could add $10 million more. To accommodate traditional viewers in the U.S., Messrs. Pacquiao and Rios duked it out around noon local time on Sunday, which was prime fight time Saturday night in New York. There may be better tax experts around than Mr. Pacquiao, who has been involved in a protracted battle with the Philippine Bureau of Internal Revenue over some $50 million in back taxes. And several factors likely contributed to the 34-year-olds decision to fight closer to home as he recovers from a knockout last year and faces the twilight of his career. But incentives matter, and in seeking better tax treatment Mr. Pacquiao is in good company with the worlds fastest man, Usain Bolt, who avoids racing in high-tax Britain. The Clash in Cotai is the latest, punchiest reminder that business can often float like a butterfly—especially when taxes sting like a bee.
Posted on: Wed, 27 Nov 2013 15:30:02 +0000
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