It is a rare moment in Chicago when the Cubs and the White Sox are united for a common cause, but if there’s anything that can bring big corporate interests together, it’s railing against taxes. As Chicago mayor Rahm Emanuel tries to push through a hike on the Windy City’s amusement tax, it’s not just the Cubs and White Sox standing together to say no, but also the Bears, Blackhawks, and Bulls, along with labor unions and trade associations for restaurants, hotels, and alcohol distributors.
That is the composition of The Coalition to Save Jobs in the Amusement Industry, who claim that “Chicago politicians want to raise concert amusement taxes by 80%. Not only will that make Chicago home to some of the highest concert and entertainment taxes in the country, it puts Chicago jobs at risk.” The Cubs, Bulls, and Blackhawks all tweeted their support of this coalition on Thursday.
In addition to supporting this effort to defeat the tax proposal, the Cubs put out a letter “To Our Fans” on their website, and it should not be lost on anyone that the Cubs, owned by the Ricketts family – late of shuttering DNAinfo and other local news sites including Chicagoist, over workers’ attempts to unionize – is teaming up with unions on this. But there’s something about the Cubs’ letter in particular that gives this pushback effort a rotten stench.
“As you may know, the current amusement tax on tickets to sporting events in Chicago, like Cubs games, is at 12% – already one of the highest in the United States. Meanwhile, the amusement tax for concerts, still high by national standards, is taxed at a lower rate, currently at 6.5%. However, if our politicians get their way, that will all change. Late last week, city officials announced a proposal to raise the tax on concert tickets to 10.5% – an increase of 80% – which would make Chicago concert ticket taxes among the highest in the United States as well.”
Did you spot the lie? It’s in that claim of an 80% increase, which if applied to a rate of 6.5% would get you to 11.7%, not 10.5%. But there’s a reason for that. There really is an 80% increase in play – on the Chicago tax, which would go from 5% to 9%. The Cubs are lumping in a 1.5% Cook County amusement tax, and while it’s not like that rate stops existing, it’s a purposeful move to include it for the purpose of making the tax rates appear more injurious. The Chicago Tribune has been on top of the real proposal by Emanuel for a month, but NBC Chicago took the bait in its Thursday story.
Also, the Cubs are being disingenuous in addressing the letter to Cubs fans, because the tax proposal has nothing to do with sporting events – only concerts. In fact, the proposal is to bring city taxes for concerts to the same level as city taxes for sporting events – the 12% rate quoted by the Cubs for the taxes on their own tickets again reflects other levies not from the city government itself. So, why do the teams care? Because their venues are also concert venues (like the Foo Fighters' visit to Wrigley Field next summer), and as it stands now, those taxes are factored into the price of tickets.
As of Thursday afternoon, there were still limited tickets available for Jay-Z’s show next month at United Center, which uses Ticketmaster to handle orders. The tickets were listed at $75, but proceeding to the order page, the cost went up to $96.10 – because of a $12.85 “Service Fee,” a $6.90 “Order Processing Fee,” and $1.35 of tax. The $1.35 would be 1.8% of the $75, so that’s not the current 5% Chicago tax or 1.5% Cook County tax. Ticketmaster just calls it “Tax,” so who knows what it really is?
Rest assured that the folks running the United Center – that would be the owners of the teams who play there – know what it all is, and know that a $75 ticket now would not be the same to their bottom line as a $75 ticket after the tax increase goes through. Of course, they could just raise the price of a $75 ticket to $80, and nobody would bat an eye because ticket prices vary from concert to concert, but where’s the fun in that?
Further lost in the complaint by Chicago’s sports teams is that while taxes on concerts at their homes would rise, the proposal eliminates the amusement tax for venues with fewer than 1,500 seats. That’s where the coalition’s idea that concert tours will bypass Chicago as a result of the tax falls flat. Jay-Z isn’t skipping Chicago, but removing a tax from smaller businesses should serve to help them attract more acts.
Emanuel, in October, cited Thalia Hall and Metro as examples of venues that would benefit from his proposal. Those theaters are owned by Bruce Finkelman and Craig Golden (Thalia Hall) and Joe Shanahan (Metro), none of whom also owns a professional sports franchise coming out against a tax that has nothing to do with sports.