Taxes and LeBron James
Were taxes a factor in LeBron James picking the Miami Heat over other teams, such as the New York Knicks, the New Jersey Nets or even his former employer, the Cleveland Cavaliers? It’s a question worth looking at:
In a July 1 blog post, the New York Post warned that “dysfunctional lawmakers in Albany” could cost the state a chance to bring the coveted athlete to New York.
“If LeBron James goes to the Miami Heat instead of the [New York] Knicks, blame our dysfunctional lawmakers in Albany, who have saddled top-earning New Yorkers with the highest state and city income taxes in the nation, soon to be 12.85 percent on top of the IRS bite,” the Post said.
The tax savings for James in Miami over New York City would be staggering, according to the Post’s analysis.
“On a five-year contract worth $96 million — what he’d get from the Knicks or the Heat — LeBron would pay $12.34 million in New York taxes.” Florida has no state income tax.
New Jersey and Ohio, the other reported frontrunners to attract James, also have state income taxes, but they are not as high as in New York. Based on a $96 million contract, James would pay $5.69 million in state taxes if he re-signed with the Cleveland Cavaliers. If he signed with the New Jersey Nets, James would pay $10.32 million in state taxes.
The economic impact of the basketball star’s departure is expected to cost Cleveland, a city already struggling economically, $48 million per season. Maybe those suggestions that Reason and Drew Carey made to improve the city are starting to look good now…but I digress.
Last year, New York Gov. David Paterson said:
You heard the mantra, ‘Tax the rich, tax the rich… We’ve done that. We’ve probably lost jobs and driven people out of the state.
Now, I’m sure that the prospects of playing with Dwayne Wade and Chris Bosh and the likelihood of winning a championship were the main factors for a competitive athelete like LeBron James, but do not underestimate how a state’s tax burden can keep a high-profile personality away.