While New Yorkers puzzle over why pitcher Cliff Lee would prefer a reported $120 million, five-year deal to come back to the Phillies, instead of a potentially richer offer from a team in New York, Horsham tax accountant John Kostenbauder points out a valuable advantage:
Living and playing in New York City, Lee faces a combined city-state tax rate of 11.5 percent for home games.
By contrast, living in Philadelphia's Pennsylvania suburbs and playing at the Phillies' stadium down in South Philly, Lee would pay just 6.6 percent.
Why not South Jersey, where so many Philly pro athletes settle? State income tax there zooms to almost 9 percent. Plus "New Jersey's property taxes are brutal," added Kostenbauder, a partner at the accounting firm WeiserMazars.
Of course, if income taxes were all Lee cared about, he'd have gone back to the Texas Rangers, located in one of the few states that still don't levy an income tax.
Kostenbauder suspects other factors, like compatibility with the Phils, whom Lee pitched for in the 2009 World Series, played a bigger role in his choice.
Which is natural and healthy, he added. "We have a saying among tax accountants [when clients ask for advice on where to live without paying the government too much]: Don't let the tax tail wag your dog."
Schools blow $63 million
The Philadelphia School District will pay $63 million to Morgan Stanley, Goldman Sachs, and Wells Fargo Bank to cancel interest-rate swaps whose value has collapsed as U.S. interest rates stay at record lows. The payments will be financed as part of a $426 million debt-restructuring deal that is supposed to trim school-borrowing costs.
School district business manager Michael Masch told me last year that the district had bought the swaps in the early 2000s to try to preserve low borrowing costs in case U.S. interest rates rose. Instead, rates have fallen, enriching the banks that sold the contracts to Philadelphia while costing taxpayers millions.
Tuesday, Masch told me the payments to end the swaps would be folded into the district's new bond issue and the costs would be paid by taxpayers over time, with interest. He said the district would also save money because the new bonds are issued at lower rates than previous bonds, which were paid off along with the swaps. He couldn't immediately equate the savings and costs of the new arrangement.
Bloomberg LP's Dunstan McNichol reported the swaps expense after reviewing documents for the pending school district bond sale.
John Elduff, boss at JTE Multimedia, the Berwyn-based publisher of Postgraduate Medicine, The Physician and Sportsmedicine, and Hospital Practice magazines, tells me he plans to revive the shuttered Collier's Weekly and Saturday Review magazines after purchasing the Collier's title, formerly owned by porno publisher Bob Guccione, for $2,000 in an auction last week.
The magazines will be published both in print and online, Elduff says. "We are mostly doing print, for Americans [aged] 55 to 90." He plans what he called research-oriented articles. That could leverage the medical and drug research and advertising that keep his other publications in business.
The two magazines will be marketed under the American Brands label, which Elduff has also purchased. He said they will look like they did in the 1950s, when they rivaled the old Curtis Publishing Co.'s Philadelphia-based Saturday Evening Post for a mass middle-class audience.
Collier's, which began life as a muckraking investigative review in the late 1800s, closed in the 1950s. The Review, originally a supplement to the New York Post, was edited in its 1920s heyday by Wilmington native Henry Seidel Canby and lingered into the 1980s.
The Saturday Evening Post, which featured minor-league fiction by major-league authors and popular illustrations by Norman Rockwell, has also been revived, by an Indiana company that targets seniors.
A frigid trip
Just Born Inc., the Bethlehem-based maker of Mike & Ikes, Marshmallow Peeps, the former Goldenberg's Peanut Chews, and other tooth decayers, is holding its annual sales convention this week in freezing Fargo, N.D., the local chamber of commerce boasts.
"The team was given an ultimatum: Make your 2010 sales goals and enjoy the 2010 convention in Hawaii; don't make the goals and we'll gather in Fargo instead," according to a report of the visit posted at the Fargo-Moorhead Chamber of Commerce website and confirmed by chamber spokeswoman Adrienne Olson. Just Born didn't immediately return calls.
Olson adds: "Two dozen Just Born personnel will converge this Monday, Dec. 13, in downtown Fargo for their annual meeting. While the 10-day forecast will treat them to temperatures in the low teens (Honolulu will be in the low 80s), the group has local manufacturers' representative and veteran candy broker Bob Ward working to turn this 'punishment' into a visit they won't soon forget."
High points include a showing of the Coen Brothers' weird police movie Fargo, a Scandinavian culture tour, and a sleigh ride.
Also, the beatings will continue until morale improves.