Want Cheaper/Better Hip Tickets? Change The Tax Law

Over the last few months, a significant amount of ‘ink’ has been spilled concerning the unfortunate health of Gord Downie, lead singer of the Tragically Hip, the band’s last Canadian tour and the subsequent resulting lack of reasonably-priced tickets for fans.

I checked our local venue and prices have been bid up anywhere from 4 to 20 times a normal price that might have been charged for the Hip just a couple of years ago.

I love the HIp, but it’s hard to stomach spending $500 or $1,000 on a night out to enjoy a band that I’ve seen at least half a dozen times.

But I know who WILL be seeing the Hip:  the corporate types with lots of tickets available for clients from box seats to front-row gawking opportunities and everything in between.

How does this happen?

The deduction of entertainment expenses for corporate tax returns.

Every year, any company can deduct 50% of any expenses related to entertainment of clients.  This includes box seats and other tickets for sporting and music events, along with other events related to entertainment (dining, wine, etc etc etc).

There’s even a suggestion that there’s a substantial amount of fraud concerning these expenses, including inflation of the costs, inclusion of additional ‘guests’ for events and so on.

Closing the loopholes themselves in this deduction would generate an estimated $400 million per year, but this doesn’t include the impact of the deduction itself.

I couldn’t find any studies that assess the impact of the tax deduction on general revenue.  That’s likely because no one wants one.  Of course, if you know of a study, please let me know.

That said, it’s safe to say that when Canada’s economy is worth $1.5 trillion per year in economic activity, even if entertainment was worth 1% of this amount, it would be worth $15 billion per year.

And a good chunk of that $15 billion per year is being written off by Lexus lawyers and Beemer punks looking for a good show.

That’s a lot of inflated value when it comes to the cost of tickets, driving them into the stratosphere.

So … if you really want to bitch about the high cost of Tragically Hip tickets, look to the cause, not the tools like Tickermaster and Stubhub.

And then do something about:  insist that our government put an end to the entertainment tax deduction.