Month: June 2010

How High Would Soccer Scores Be With No Goalies?

I’m an American, and while following the World Cup has been interesting, I will admit freely that I mentally tinker with the game as I watch it, since it is so different from most American sports. The big three American sports (football, baseball, and basketball) have higher scoring and are chock-full of statistical record keeping, so that fans can assess their teams’ progress even when scores are low. While I am learning to appreciate the explosive joy that a goal can bring in a game with so few of them, I thought it worthwhile to ask a question: how many goals would be scored in World Cup-level soccer if there were no goalies at all?

According to FIFA, 2.2 goals have been scored per match thus far in the World Cup, though 1-0 has been the most common outcome thus far. While teams have combined for almost 28 shots per match thus far, they have managed only 10.2 shots on target per match thus far. By definition, total goals in a match would thus rise to at least 10 if matches were played without goalies.

But if there were no goalies, game play would be altered in a number of ways. Teams would be more likely to shoot, raising scoring further. Defenders would spend more time in the box as “armless goalies”, so that not all shots-on-target were converted. Even without goalies, the percentage of shots-on-target might not rise dramatically, since the presence of defensive players alters many shots. As an upper bound, assume that total shots per match doubled to around 56, with 35% of shots-on-target (same as today). This yields roughly 20 goals per match, with scores of the 12-8 or 11-9 variety quite normal.

While scores like 12-8 and 14-6 sound astronomically high to the die-hard soccer fan, these are still less than one-fourth of basketball scoring, similar to high scoring baseball games, and about double football scoring. With rules change governing the offside rule or otherwise floated as a way to increase scoring, it’s interesting to note that even a radical proposal would not turn soccer into basketball. It’s difficult to score in soccer, even if there are no goalies!

Posted on by praveenghanta 0

A Better Capital Gains Tax

Taxes on long-term capital gains have fluctuated in recent years, with rates as low as 0% (for lower income groups) and as high as 28%. At the end of 2010 capital gains rates will likely revert to 20% after being at 15% for several years. While long-term term capital gains enjoy a tax break, short term capital gains (on positions held less than one year) have long been taxed at marginal income tax rates. While dividends have more recently been accorded the same tax breaks as capital gains, interest payments continue to be taxed as marginal income.

Capital gains tax breaks are designed to encourage investors to invest in the economy for the long term, thereby promoting economic growth. As currently structured, the capital gains tax break doesn’t really achieve this, as it simply rewards investors that hold a position for more than one year. The law does not distinguish between investments in startups or IPOs and in purchases of existing equity shares. With regard to real estate, the law encourages the tax-free flipping of properties via 1031 transactions, but does not reward investors who improve their properties.

Rather than subsidizing investments in existing shares and property, shouldn’t capital gains tax breaks attempt to promote new investments? This could be easily accomplished by lowering the capital gains tax rate to 0% for all new capital investments, irrespective of investment duration. A new capital investment could be defined as an investment in which the target company directly receives the proceeds of the investment. Investments in IPOs, secondary offerings, startup companies (including angels and VCs), and real property improvements would qualify, while purchasing of existing shares and real estate would not.

A 0% tax rate on new investments would incentivize real investment in the economy, rather than encouraging simple tax-related shuffling of existing investments. In order to offset deficit impacts, traditional capital gains tax breaks could be reduced or eliminated. Moving to a system in which new investment is incentivized would tip American finance away from the casino mentality of recent years, and back towards its original purpose: investing in promising companies for profit.

Posted on by praveenghanta 2