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ERIC Number: ED536486
Record Type: Non-Journal
Publication Date: 2010-Apr
Pages: 18
Abstractor: ERIC
Reference Count: 4
Intercollegiate Athletics Subsidies: A Regressive Tax
Denhart, Matthew; Vedder, Richard
Center for College Affordability and Productivity (NJ1)
For most colleges and universities in the United States, intercollegiate athletics is a losing financial proposition. The vast majority ICA departments do not break even and require subsidization from the institution as a whole. When schools are forced to heavily subsidize athletics, ICA serves to impose an "athletics tax" on other dimensions of the school. This tax has become increasingly worrisome due to the limited budget resources in the current economic climate. However, the main story is that the magnitude of the athletics tax is greatly unequal across institutions and that this tax is highly regressive. The schools and athletic conferences that already have well established teams are likewise the well-known and affluent flagship public institutions. Here, the athletics tax is negligible. Yet, at the lesser conferences the picture is less rosy. Athletics impose a much greater tax with an ICA tuition tax that in some cases reaches beyond 15 percent. The policy implications of this are interesting. Liberals should be upset over the regressive nature of the ICA arms race and its perceived unfairness in burdening the relatively less affluent members of society. Conservatives should also be upset because of the inefficiencies and distortions in the allocation of resources implicit in such subsidies. Persons of all political orientations should be concerned by the bundling of services--a student wanting to "buy" academic services that after a period of relative intense study leads to a bachelor's degree, has to also buy entertainment services that she or he might wish to forego. To be fair, the magnitude of the athletic tax at most American institutions is still very small, and it is certainly naive to believe that fixing the problem of exploding ICA costs would have more than a marginal effect on the broader problem of higher education costs rising faster than the incomes of Americans who consume these services. Nonetheless, marginal effects can be important, and there are some schools in America where the ICA tax on students is relatively large, so eliminating or reducing that tax could go a long way towards making college more affordable. (Contains 3 figures, 3 tables, and 13 footnotes.)
Center for College Affordability and Productivity. 1055 Thomas Jefferson Street NW Suite L 26, Washington, DC 20007. Tel: 202-621-0536; e-mail:; Web site:
Publication Type: Reports - Evaluative
Education Level: Higher Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: Center for College Affordability and Productivity (CCAP)