Boston Globe columnist Jeff Jacoby takes a pragmatic look at NBA star LeBron James’s decision to play for the Miami Heat.
It was a no-brainer for James to pick south Florida over a move to New York or remaining in Cleveland, but taxes likely had as much to do with James’s choice as anything else, Jacoby argues.
Had James chosen to play for the New York Knicks, for example, he would have been saddled with a city income tax of 12.85 percent. That’s on top of what the IRS takes.
“Consequently, a five-year, $96 million contract (the estimated deal he could get in either city), would cost James $12.34 million in New York taxes, but nothing in Miami,” which has no city income tax. In fact, Florida itself has no state income tax.
Cleveland, too, has a city income tax, and it was pointed out that even a Heat contract worth $29 million less than what the Cavaliers offered him would still have left James with $1 million more in take-home pay.
Jacoby adds that avoiding high taxes is not the only reason sports stars – or anyone else – move from one locale to another:
Weather, family, education, love – any of them may play a role. But it is no coincidence that far more people migrate from high-tax states (California, New York, Ohio) to low-tax states (Florida, New Hampshire, Texas) than the other way around. When tax rates bite, taxpayers and businesses are driven to escape – or are deterred from coming in the first place. There’s nothing inexplicable about the fact that people don’t like paying high taxes and may change their lives to avoid them. The real mystery is why so many advocates of high taxes never seem to learn that lesson.
The Cotton Boll Conspiracy 