UNCLE SAM STRIKES OUT: They’re starting to call them the Los Angeles Tax Dodgers — owners Frank and Jamie McCourt having made $108 million in five years but not paying a dime in state or federal taxes.
All legal-like, too, it seems, tax laws being what they are. And Washington tax lobbyists and Congress being what they are.
The fact that Joe and Jill Six-Pack sitting in the bleachers pay more taxes than they do does not appear to bother the McCourts. As the late Leona Helmsley famously put it, “Only little people pay taxes.”
Remember, the McCourts, now in the throes of divorce hell, basically are real estate hustlers, not dyed-in-the-wool sports enthusiasts. Their money, which they used to buy the Dodgers in 2004, comes from things like Boston parking lots. Once in L.A., they lived the lifestyle of the rich and tactless. Jamie is now demanding $1 million a month in support, in order to maintain her lifestyle, including her jet trips.
The rich are different from you and me: They don’t pay taxes if they can find a loophole big enough. The McCourts apparently designed their household economy to avoid taxes. As I gather the pitiful scraps showing my 2009 earnings, I noticed that I pay more taxes on my Social Security than the McCourts do on the $108 million they earned in 2004-09. Is something wrong with this picture?
As Michael Hiltzik wrote in the L.A. Times, “This reminds me of the old line about how true scandal lies not in what’s illegal but what’s legal.” The McCourts appear to have dodged taxes, in part, by claiming paper losses on commercial real estate. “They’re tax losses,” as Jamie’s lawyer put it. “I don’t mean real losses.”
The McCourts have managed not only to live well but to acquire seven houses and two L.A.-area lots they intend to build on, according to published reports. They bought a $21-million home near the Playboy Mansion and the once-happy couple made $14 million in improvements.
Now, I don’t mind people owning a lot of homes. Living in Santa Barbara, I’m used to that. I own a modest San Roque tract house and I’m happy. Sue enjoys her gardening far more than Jamie seems to enjoy her empire, judging from the divorce papers. Nor do I mind people making more money than I do. Again, I live in Santa Barbara, so I’m used to that, too.
If I wanted to be rich, I wouldn’t have gone into journalism. So I only have myself to blame. But it does go against my sense of basic American fairness that people worth an estimated billion dollars, like the McCourts, pay not a dime in taxes to help support the land they profess to love. Men and women have died on battlefields to keep the nation free for people like the McCourts to shamelessly live rapacious, consumerholic lives.
One of Frank’s partnerships paid him $23 million in 2008, according to Jamie’s divorce papers. Alas, another red-ink year for him, at least on the books. Meanwhile, Frank and Jamie are squabbling like the pre-revolution French aristocracy, or fishmongers. Eventually, no doubt, Jamie will be awarded an obscene amount of monthly subsistence, if not $1 million; their homes will be sold off or split off; and the kids — the Dodger players, that is — will try to pretend it isn’t happening. The drama will eventually subside.
Those paper losses will burn off. And maybe the taxman will catch up with the couple: Officials in Massachusetts, where they once lived, are investigating. Exactly why the McCourts decided to opt for splitsville and derail their profligate lifestyle and gravy train I don’t know, other than Frank’s allegation in a 664-page court filing that he fired Jamie as the club’s $2-million-a-year CEO in part for having an affair with her driver, who was employed by the Dodgers. Frank’s attorneys allege the two spent two-and-a-half weeks in France last summer and billed the team for the trip. (Jamie has neither confirmed nor denied the affair.)
You may find it odd that I plan to shell out hard-earned cash to watch the Dodgers. Before this tax thing broke, I arranged for my sister, Joyce, in Scottsdale, to buy tickets to two spring-training games there, one involving the Dodgers. Joyce, Scottsdale nieces Nancy and Lynn, and my brother, Bruce, and his wife, Karen, from Indianapolis plan to sit in the sun and eat hot dogs. But not Dodger Dogs, because the games will be played at Scottsdale Stadium, not the Dodgers’ huge new stadium. So I guess Frankie and Jamie won’t get a piece of the action. And Manny Ramirez may or may not even be there.
Oh, by the way, in case you’re planning a trip to Chávez Ravine this year, Frank plans to raise ticket and parking prices, as he has every year. Just don’t try to take the expense off your taxes, unless your accountant says it’s okay. Otherwise, you’re liable to strike out with the IRS. If you get in trouble, see Frank McCourt’s tax guy.