During the last two years, the EPL has produced three of the four semi-finalists in the Champions League, a fact that has lead UEFA chief Michel Platini to consider changing qualification rules in order to re-balance the competition. Well, it looks like economic policy may do the job for him. Britain is about to hike its top income tax rate to 50%, and the pound has lost ground to the Euro. In contrast, Spain taxes foreign players at 24%. Obviously, this gives teams in La Liga a big edge in the transfer market. Could it be that Real Madrid have been "bidding against themselves" as they collect their transfer trophies?
See this story in The Guardian -- Tax burden will end Premier League's domination -- for a discussion of the tax hike's implications.
Thanks to Andrew Siegler for the link, who sees the positives in this for the English game: "I actually think this will be a good thing for English football, incentivizing English players to move abroad and learn how to play less like headless chickens." Yeow!
Question for students: The Guardian's story states the follwing: "According to agents, most marquee signings will simply demand that clubs make up the difference so that the players receive the same net wage. In other cases, where clubs refuse to make up the difference, players are increasingly likely to opt for Spain or elsewhere in order to relieve their tax burden." What sorts of players will be successful in "preserving" their net wage, and what sorts will move abroad?