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Russell's Ramblings
by Russell Jaslow

May Musings
5/17/09

Rochester, N.Y.—It's the month of May. That usually means the minds of sports fans are centered around the Midwest -- first the Kentucky Derby and then to Indianapolis. This tradition brings a very interesting dichotomy nowadays between these two big races of different sorts of horsepower. More on that later.

First, let's talk about an individual dichotomy. That of the rich getting away with keeping their money from the government while the working sap looks the other way by continuously putting said rich on a pedestal while railing on the government, all the while paying more to the "establishment" than the rich do.

Of course, I'm talking about Helio Castroneves. And I'm also talking about you, the average Joe and Josephine. If you are one of the fortunate ones who has a well paying job as well as a spouse with a well paying job, not necessarily upper middle class, but bordering on it, then I want you to perform an exercise. I must warn you. This exercise could be quite depressing, especially if you live in a high taxed state such as New York or California.

Pull out your 2008 Federal and State tax returns as well as your W-2 statements. Now, add up what you paid in Federal income taxes, State income taxes, Social Security taxes, and Medicare taxes. If you are from a nice two-income household, most likely that amount will be in the $40,000-50,000 range depending on what your State income tax rate is. I said this exercise would leave you depressed.

That amount just so happens to be the approximate amount Helio Castroneves put down as income on his Federal tax return. Yet, Helio lives in a $3.5 million home. You and I certainly do not. Even if you pay half the above amount, it is still probably more than what Castroneves actually paid out.

That alone isn't what galls me. What galls me even more are the reactions of the average person. The feeling that the government went after Helio to scare the rest of us into paying our taxes. Say what? What does going after someone who pays less than we do despite having a multi-million dollar income have to do with making sure we accurately state our charitable contributions?

I pay taxes not out of fear. I pay my taxes because a) it is the law and b) it is an obligation every person has to live in this country. It doesn't mean I always like it. It doesn't mean I don't complain (you should have heard me when Governor Paterson wanted to tax everything under the sun to close a State budget gap created by incompetence, and I could go on and on about the illegal tolls on the New York State Thruway). However, I also understand that taxes are a necessity. Even the Founding Fathers knew that. They were not out to abolish taxes. They were out to abolish taxation without representation. Thus, I always vote, pay my taxes, and occasionally bitch about it along the way.

But how could anyone defend Castroneves when they themselves are paying as much as he claims as his income while worried they will have any income at all during these tough times? How could anyone equate his persecution with a veiled attempt to go after the little guy?

I understand the concept of athletes setting up delayed annuities and in fact approve of the concept. Athletes have a limited time span to make their money, so the need to squirrel some of it away for future use without losing it all now on taxes is fine with me. The government gives us little guys the same opportunities. They are called 401K plans, IRAs, Roth IRA's, and our own ability to set up annuities. And the government also helps us out by allowing us to pay for our medical insurance premiums and expenses with pre-tax dollars.

And yes, I know Castroneves was acquitted by a jury (though a number of those charges the judge declared a mistrial on) in a very complicated case that most likely was not understood by most of them.

I remember someone once telling me you don't need to cheat on your taxes if you know the rules. There are plenty of legal ways to save tax dollars. The IRS spells them all out for you. To be fair, I will give Castroneves two benefits of the doubt. For one, I always found it hard to believe that his tax attorney, Alan Miller, would get involved in an illegal scheme. He was too established and experienced to get mixed up in that sort of thing.

I never bought into Castroneves' overexuberant, I am always right, woe is me persona he displays at every turn of events. It is so over the top, it can't possibly be genuine. There's a reason why Jimmy Vasser names Helio Castroneves as his favorite actor...

Well, we'll see just how truthful Helio can be. The other benefit of the doubt was one of his defense strategies. It was claimed that the first delayed annuity comes due soon, and that Helio will pay $1.5 million of taxes on it. I believe it comes due this month of May, ironically enough.

I'd love to see whether that check to the IRS actually gets written. In the meantime, we will all keep writing those checks for $40,000-50,000 every year while Helio lives in that $3.5 million home. And for some odd reason, many of us will actually defend him...

A couple of weeks ago I was in Fort Wayne, Indiana on business. One night, we went out to dinner with the prime contractor and the customer, both of whom were from out of town. One of them started talking about the Kentucky Derby and how he would love to attend it one day. He also mentioned other sporting events he would like to see at least once. One of the locals brought up the Indy 500. Yes, he responded, that would be a nice one to add as well, but it would be so hard to get a ticket.

At that point, I mentioned how far the Indy 500 had fallen. They were completely stunned that you could walk up on the day of the event, and buy a ticket, even at a discount from a scalper. They simply could not believe it. They had no idea how the Indy 500 could possibly become "just another sporting event."

Horse racing has virtually disappeared as a sport of note in this country. Many tracks make more money with slot machines and other games of chance. Some even have dropped horse racing altogether for the lure of mini-casinos. Yet, despite the sport being ignored by all, the Kentucky Derby still remains one of the healthiest sports events in the world. Tickets are difficult to come by. TV ratings are not only high, but sometimes break their own records. The kingpin event is very healthy amongst the dismal state of the sport.

This is not the case with the Indy 500. Both the sport and the premier event have sunk hand-in-hand. If the Kentucky Derby was able to avoid such a fate, why didn't the Indy 500? The answer is pretty simple. The Kentucky Derby and the folks who run it aren't responsible for the problems of the sport in general. That is not the case with the Indy 500. The event and the folks who run it are directly responsible for the demise of the sport. Thus, they too suffer from the ill effects.

This is the first of what I'm calling Russell's Ramblings. They will appear on a semi-regular (perhaps the proper word should be erratic) basis. They will include whatever talking about whatever as long as it's about auto racing. They will be ... well ... ramblings. Call them commentaries. Call them blogs. Call them nonsense. I have no goals of what I am trying to achieve with them, though some may accuse me of trying to be a Gordon Kirby The Way It Is wannabe. But then, I've been accused of (and called) a lot worse...

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