Darrelle Revis will make an extra $1.3m per year when he moves to Florida, because he pays zero state income tax, as opposed to 9% in New Jersey.
Drew Brees pays almost 50% in income taxes. Joe Flacco pays 52%.
All else equal, it’s better to play for a Texas, Florida, or Washington team than any other team. New Jersey/NYC seems to be the worst.
I understand that this issue was part of LeBron’s decision making process as well. Phil Mickelson also brought it up recently when CA passed their new tax rates, although he suggested he would just play (and earn) less instead of moving.
Yeah, the article mentions LeBron and Phil and Tiger, too.
Americans for Tax Reform state that Tony Romo is highest paid NFL athlete–even more than Brees or Flacco–once you consider the effects of state and local taxes. (I don’t know if this includes property tax, though.)
^ Sorry, didn’t actually read the article. The topic was also discussed during the NFL draft, as Joeckel (the #2 pick) is likely to take home more than Fisher (the #1 pick) because he was drafted by Jacksonville.
I think the state tax issue is becoming more important for companies looking at where they are placing their employees. I live in Texas and we’re seeing a lot of energy companies moving employees here from offices out of state. I’m sure part of it is to concentrate operations, but Exxon is building a 300 acre complex north of Houston to house 10,000 employees and half of those employees are already in metro Houston. The other half are relocations from other Exxon offices in Northern Virginia and offices in the mid-west.
Also Deutsche Bank opened their big office in Jacksonville a couple of years back to house a lot of back office operations and some of their new IB staff. If you can get people out of high tax and COL areas, can in theory pay lower salaries and the people have the same after tax take home income.
^ Property taxes and state corporate rates also play a big role. Texas basically has a 1% corporate income tax rate compared to Virginia’s 6%.