The new GOP tax plan could mean less lavish sports stadiums.
The federal government has allowed municipalities to pay for stadium construction and renovation projects with tax free bonds since 2000 — which has cost the feds $3.7 billion, Bloomberg reported. But if the proposal passes, investors who purchase bonds to pay for these facilities would be responsible for paying federal income taxes on the interest.
Although using public funds to pay for these projects isn't as prevalent as it once was, it's still fairly commonplace, Bloomberg reported. Take a look at these numbers: Between 2000 and 2016, 36 of 45 major-league stadiums that were built or renovated used tax exempt-bonds to help foot the construction bill, according to a Brookings study.
According to the Joint Commission on Taxation, this provision, which would apply to bonds issued after Nov. 2 of this year, is projected to increase tax revenue $200 million between 2018 and 2027, Bloomberg reported.
According to Victor Matheson, economics professor of the College of the Holy Cross, while the tax plan would make stadium construction more expensive, it wouldn't stop the facilities from getting built.
"It's the difference between paying five percent on your mortgage and paying seven percent on your mortgage," said Matheson. "Obviously that makes a difference, but if mortgage rates jumped two percentage points, it wouldn't mean the end of housing."
