With LeBron James set to address the nation tomorrow night about his free-agency plans — and fellow NBA superstars Chris Bosh and Dwayne Wade signing with the Miami Heat — Bill Bradley of the Sacramento Bee suggests there’s an overlooked non-basketball influence on top free agents:
The absence of state income tax in Florida and Texas is a big reason the Miami Heat and Dallas Mavericks can be active in free agency.
Compare that to the New York Knicks, whose players have to pay combined state and city income taxes of 12.618 percent. That means Amar’e Stoudemire’s five-year, $99.8 million deal with the Knicks is worth about $12 million less than if he had signed with the Heat.
While athletes are taxed by other states when playing road games, they come out well ahead if they live in Texas or Florida.
Yes, these Florida and Texas teams had to have salary cap space to get involved in this circus. Yes, they wanted to improve their rosters.
But think about this: There are five NBA teams in Florida and Texas. Those are the only teams without state income tax. All five are among the most competitive in the league.
It won’t be discussed in news conferences, but state income tax will speak loudly this week.
I wonder what would happen if a LeBron James-type player actually came out and said, “Yeah, I considered the Knicks, but the high income taxes convinced me to go elsewhere.” Would it have any impact on the political culture?
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And it is not just income tax they consider financially, there is also cost of living. A lot of players of NY teams live in Connecticut or New Jersey to both pay less income tax and lower cost of living.
Georgia’s Aspiring future-Republican Governors all are talking about eliminating the income tax:
http://blogs.ajc.com/political-insider-jim-galloway/2010/07/04/the-income-tax-and-the-gop-race-for-governor/
From what I’ve heard of Georgia, it sounds like a decent place for a freedom-lover to live — as long as he’s not black. Similarly, I live in the middle of Missouri, which is also relatively reasonable — as long as you don’t want to use illegal drugs.
What Are The Property Rights Of NBA Stars?
The teams that are trying to lure the stars probably are heavy in the ‘giving back to the community rhetoic’ category.
Stars – turn them on their ear – announce that the first team to oppose all government subsidies will get your services.
ESPN’s Chris Broussard made that allusion a couple weeks ago when I happened to be flipping channels. It’s an obvious influential consideration of free agency that everyone remotely interested already knows (sorry, S; neither you or Mr. Bradley are breaking any news here). Oddly, Chris has not mentioned it since and I haven’t heard any of the ESPN talking heads considering it either. I believe Broussard (he’s pretty new there) was taken into a soundproof backroom by a 275 lb Disney/ABC/Fed PR specialist.
Taxes were a major reason Cristiano Ronaldo left Manchester United to play in Spain. Here is an article from June of last year
by the same logic, the federal income tax should likewise be abolished to perform better in the olympics and the world cup.
so why the focus on taking something away from the states that the federal government would be happy to edge itself in on?
just abolish all income taxes.
What about Memphis? Tennessee doesn’t tax income from employment, only interest and dividends.
The problem is that Memphis is an awful place to live compared to Dallas and Miami. And the Grizzlies are hardly a team that players want to flock to.
That’s kinda the point. It is the fly in the theory’s ointment.
Skip—you wrote:
“But think about this: There are five NBA teams in Florida and Texas. Those are the only teams without state income tax. All five are among the most competitive in the league.”
The Memphis Grizzlies play in Tennessee. Tennessee has no state income tax either. (The other six states with no state income tax are Alaska, Nevada, New Hampshire, Wyoming, South Dakota, and Washington.)
http://www.irs.gov/efile/article/0,,id=130684,00.html
I had no idea that different states don’t have income taxes which affect the NBA players. It makes a little more sense now why LeBron decided to go to Miami. That definitely ended up helping out all of those guys.
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