Michael Jordan and the Progressive Income Tax

A blog about business and economics.
July 23 2012 6:04 PM

Michael Jordan and the Progressive Income Tax

LAS VEGAS, NV - MARCH 30: Charlotte Bobcats owner Michael Jordan speaks onstage at the 11th annual Michael Jordan Celebrity Invitational gala at the Aria Resort & Casino at CityCenter March 30, 2011 in Las Vegas, Nevada.

Photo by Ethan Miller/Getty Images for MJCI

Apparently unaware that there's a classic philosophical argument against progressive taxation that uses Wilt Chamberlain as an example, Senator Jon Kyl of Arizona took to the Senate floor today to present an argument with a completely different structure that's all about Michael Jordan:

There was a recent editorial in The Wall Street Journal that talked about the Chicago Bulls and Michael Jordan, and it noticed that they weren't a very impressive team before Michael Jordan came, and the team wasn't making very much money and neither were any of the players. When Michael Jordan came, after he established how great he would be, he was an enormous, almost unheard of salary. Did the other players say "that's not fair"? No, actually all the other players got big salary increases too. Nothing like Michael Jordan, but they got huge salary increases. Why? Because he made the team better. And it began to succeed and eventually—you all know the story—the world championships.
The whole franchise did well, the people selling popcorn, the people parking the cars, made much more money than they ever would have had Michael Jordan never came to the team. But Michael Jordan still made many times more than any of them did.

I might have used the interplay between Jordan and the popcorn guy to argue the opposite point. Obviously Michael Jordan had the rarer and more impressive skill than the more or less anonymous cogs in the Chicago Bulls labor force. Still, Jordan didn't earn a high wage "because he was good at basketball." He earned a high wage because his basketball skills were embedded in a complicated high-value enterprise that depended on labor all up and down the skill ladder.

This also mangles the actual basketball history. Jordan's huge salary increase came between the 1995-96 season (for which he was paid $3.85 million) and the 1996-97 season (for which he was paid just over $30 million). By this time, the Jordan Bulls had already won four championships. What's more, rather than benefitting from Jordan's pay raise his teammates suffered. Scottie Pippen, for example, took a slight pay cut fro $2.925 million to $2.250 million to help keep the team together.

Last, it's difficult to discuss NBA player salaries without noting that the workforce labor for an anti-competitive cartel that presently employs a wide range of salary cap rules to reduce player salary. It's true that it's difficult to look at Kevin Durant's pay package and feel that he's impoverished somewhere, but it is certainly a clear case of capital owners conspiring to screw their workers over and thus something of an odd example for Galt-style logic.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.



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