Why is Catching a Baseball Taxable Income?

From the Mises Economics Blog:

As soon as 21-year-old Matt Murphy snagged the valuable piece of sports history Tuesday night, his souvenir became taxable income in the eyes of the Internal Revenue Service, according to experts.

“It’s an expensive catch,” said John Barrie, a tax lawyer with Bryan Cave LLP in New York who grew up watching the Giants play at Candlestick Park. “Once he took possession of the ball and it was his ball, it was income to him based on its value as of yesterday,”

By most estimates, the ball that put Bonds atop the list of all-time home run hitters with 756 would sell in the half-million dollar range on the open market or at auction.

That would instantly put Murphy, a college student from Queens, in the highest tax bracket for individual income, where he would face a tax rate of about 35 percent, or about $210,000 on a $600,000 ball.

Even if he does not sell the ball, Murphy would still owe the taxes based on a reasonable estimate of its value, according to Barrie. Capital gains taxes also could be levied in the future as the ball gains value, he said…

The Wall Street Journal’s Law Blog also takes a look at the the tax implications for the fan who caught it:

As Barry Bonds closes in on Hank Aaron’s home-run record, a fun tax-law question looms: If you’re the lucky fan who catches the record-breaking home run ball, what are the tax consequences?

“Everyone’s sure they know the right answer, but there’s very little agreement” on what it is, tax lawyer Phillip Mann of Miller & Chevalier tells the WSJ’s Tom Herman in this article. Here are the choices:

1. The fan who catches the historic ball shouldn’t owe tax until he or she sells it. This is the common sense view, though as Herman points out common sense sometimes doesn’t comport with the tax code.
2. It’s taxable income to the fan the instant that person catches the ball because it’s “accession to wealth.” This view logically stems from cases saying that someone who finds a “treasure trove” owes tax on it right away.

And if that isn’t enough to confuse you, the redditors argue amongst themselves about who owes whom what.

AT&T Censors Pearl Jam Because of Anti-Bush Lyric

From PearlJam.com:

After concluding our Sunday night show at Lollapalooza, fans informed us that portions of that performance were missing and may have been censored by AT&T during the “Blue Room” Live Lollapalooza Webcast.

When asked about the missing performance, AT&T informed Lollapalooza that portions of the show were in fact missing from the webcast, and that their content monitor had made a mistake in cutting them.

During the performance of “Daughter” the following lyrics were sung to the tune of Pink Floyd’s “Another Brick in the Wall” but were cut from the webcast:

– “George Bush, leave this world alone.” (the second time it was sung); and

– “George Bush find yourself another home.”

This, of course, troubles us as artists but also as citizens concerned with the issue of censorship and the increasingly consolidated control of the media.