Can someone expand on why Joe Louis shouldn't have been made to pay taxes...

If you donate to charity it’s with money you already paid tax on. This is what people never understand. If you are self employed (like a boxer) the tax is not taken from your wages before you get it. You have to pay an accountant to advise you to set aside money to pay tax on your yearly income. A boxers purse is not his money to spend until he’s paid all his expenses which includes tax. Only the net belongs to the boxer. Not the gross.

I don’t know who let him hand over his paycheck before paying tax on it but it makes no sense. You can’t hand over the gross if only the net belongs to you.

What happened to his managers share? Did Julian black get paid?

 

Yes, I heard Joe had a few girlfriends on the payroll. He had them in apartments all over the place that he paid for. His household bills included more than one household...

 

Ali would refuse to join the Army even in WW2, Joe Louis was humble and down to earth guy, I respect him much more as a man than that egoist Muhammad Ali

 

"I would suggest most servicemen would sooner be in a theatre of war than in the ring with a ranked heavyweight contender intent on koing you."

If by theatre of war, you mean an actual battlefield, I don't think so. I recall an American football player back in the sixties saying football was like war, and a couple of WWII vets who had played football were asked to comment on it and said football is a game. In war they are shooting at you to kill you.

Obviously, it is no fun being in the ring with someone like Dempsey or Tyson even if one is a good fighter, but I think all their opponents lived through the experience. That is not at all true of a battlefield.

 

I don't believe I mentioned the word battlefield. playing American Football isn't exactly the same as facing Joe Louis is it?

 

A charitable donation is a tax deduction. You pay tax on income minus the donation.

 

I would legitimately read a book on this.

 

"I don't believe I mentioned the word battlefield"

Okay, but honestly I think war analogies to any sport are best avoided.

"playing American Football isn't exactly the same as facing Joe Louis is it?"

Hard to say. Getting hit by a muscular 250 or heavier body running at full speed (and you might be running at full speed also) is obviously a big shock. Watching NFL football games a lot as I do, it is a rare one in which someone isn't taken off the field with a concussion. Dementia among retired football players is a high visibility problem. Perhaps dementia is a bigger problem in boxing, but football also has the problem of severe skeletal injuries. Ending up a paraplegic is not that uncommon. In the US, there seems to be a movement among parents to discourage young men from going into football with basketball, baseball, and soccer viewed as better alternatives.

 

Ive never understood the sympathy for Louis vis a vis his taxes. He knew his obligation before, during, and after and simply ignored it. Its not like this was an isolated incident. Louis was known to spend money like water. Like a lot of great athletes he wasnt equipped to be wealthy. But not being a good money manager is no get out of jail free card. Often times being ignorant will get you out of jail time or penalties but it doesnt get you out of your original obligation EVER. Louis wasnt a victim, period. His troubles were directly the result of his own actions. The fact that he donated his money to the war effort didnt relieve his tax obligation. He still would have owed the government taxes on that income. Instead the argument his supporters have bandied about is that because he gave the governments money to a branch of the government he should have been exempt. Sorry, but I dont recall anyone electing Louis to congress and giving him the responsibility to deem where the federal government spends his tax money. Doesnt work like that and thank god.

 

On a side note and nothing to do with Louis .. Hearns had the same problem and owed the IRS huge .. I tip my hat to Tommy because he knew it was his own doing and dealt with his problem head on

 

What happened was, during WWII, Joe Louis made two defenses of his title - two rematches against Buddy Baer and Abe Simon - and donated his entire purses to the Army and Navy Relief Funds.

Today, if you donate money you earn to a charitable organization you can write that money off. Meaning, if you made $100 and donated $20 away, at the end of the year you only owe taxes on the $80. Not the $100. Because you donated the other $20.

Apparently, back then, there were no tax write offs.

On top of that, the top tax bracket (which Louis was in) was more than 81 percent. So for every $100 he earned, he owed $81 in taxes and kept $19.

So when Louis donated his entire purses, twice, he still owed 81 percent in taxes on both purses - even though he didn't keep any of the money.

And since he had nothing but a military income for five years, which was next to nothing, he never paid the taxes on the two fights. And he racked up penalties every year he didn't pay them off.

But he could never pay them off, because when he started boxing again, he still owed 81 percent of his income for taxes on the new purses, too.

For a while, he was fighting, paying taxes on the new purses, then just giving the 11 percent left over to pay the old bills. But he couldn't catch up. Once he retired, it kept mounting again.

By the 1960s, he owed millions in taxes and penalties because the number just multiplied year after year. Each year he owed more than the previous year. It was a snowball effect.

Which sucked, because he was a fairly wealthy man when the war began. By the time the war was over, he was basically destitute and could never climb out of the hole.

 

As tax rates on the top tax bracket shrunk over the years, and tax laws were changed so charitable contributions could be written off, Louis' ever increasing debt seemed ridiculous.

There are people doing life in prison right now (because 'three strikes laws') for smoking weed.

When weed becomes legal in all 50 states, it's going to seem weird having a bunch of people in prison serving life sentences doing something that's legal now.

I imagine this wanting to give Louis a break goes along the same lines. Once he died, they never got their money anyway because he didn't have enough money to pay for his own funeral. They just tormented an old man for decades for something that had been changed and made legal decades earlier.

 

It was terrible advice. The fights both took place within two months of each other in 1942. I don't know if they were told they could write off the donation. Or if there was an agreement with the Relief organizations and the IRS said they never agreed to it and demanded payment. Who knows. At the time, there was a government drum beat for citizens to buy war bonds and donate anything they could to the war effort. So I can see them getting swept up in that. But the IRS was relentless.

Those two months basically ruined the next 40 years of his life.

 

That’s why it makes me think the government didn’t absolutely trust what was going on in the first place. Maybe they didn’t believe the profit after training expenses from each promotion was exactly genuine?

Something does not add up.

Presumably his manager and the promoter all got into the same trouble?

Why was this only Joes problem? I can’t inagine julian Black took his manager fee paid his tax on it and kept the rest. that would be really bad press for the Joe Louis management and would have made the news.

 

There's no mention of Black or Roxborough getting in any tax trouble.

I think the problem was you couldn't write off charitable donations back then. Especially during the War when the US government needed every dime it could get. And, also, the 81 percent tax bracket meant if you missed payment on one big purse you were screwed. You miss payments on two, and you owed the government all your money forever.

Because you owed so much money (81 percent) every time you got paid, you could never dig out with the 19 percent left over.