Taxes and speed

Usain Bolt will not compete in Britain this year because doing so would make him pay taxes on his huge endorsements collected in 2010. Here is the story:

Britain's sports minister offered to help resolve the tax issues that have caused Olympic champion Usain Bolt to withdraw from the Crystal Palace Diamond League meet.

Bolt announced on Monday he would not compete at the August 13-14 event because his earnings in London would be greatly diminished after taxes.

Sports Minister Hugh Robertson told the BBC he'll see what he can do, but said "three weeks doesn't give us a whole lot of time to organize a tax concession."

The British finance ministry has already exempted visiting soccer players from local tax laws to ensure the Champions League final can be staged at Wembley Stadium next year. (From USA Today). More at NY Times economix blog.

It is great seeing governments compete! Competition is what forces businesses to keep costs low and quality high. Typically governments have not had to compete much, but in the increasingly globalized world athletes like the Champions League soccer players or Usain Bolt can increasingly "shop" among jurisdictions for where to offer their entertainment services. This will put long overdue pressure on jurisdictions to be more people-friendly. US states and cities are also experiencing the same pressures to have competitive tax environments, as illustrated by this story about choices of locations for boxing bouts.