LeBron James skips CA — again

LeBron James skips CA — again

LeBron JamesLeBron James just signed a contract to go back to Cleveland from Miami. Travis Waldron at ThinkProgress gloats this disproves theories that sports superstars avoid states with income taxes, such as Ohio, for those without, such as Florida — as James himself did four years ago:

“Now, however, James has returned to Ohio, where the income tax is higher than the 0 percent rate Florida levies, so don’t expect a similar drumbeat of anti-tax madness (unless, of course, they argue that Gov. John Kasich’s tax cuts are the reason James feels more comfortable going back, or something). That isn’t to say James won’t feel the impact of state taxes — Kiplinger estimates that he’ll pay about $1.19 million in state taxes on his basketball salary alone.”

But notice where James did not go: California. He could have come here in 2010, but didn’t.

And now, he could have turned the Clippers into a championship team (assuming that crazy Donald Sterling distraction ever goes away), while becoming a Hollywood star like Shaq.

But here’s the state top income tax rates:

0 percent — Florida

5.4 percent — Ohio

13.3 percent — California

That is, California would gouge him at 2.5 times the rate of Ohio.

Ohio also is special for James because he was born and raised in Akron, just 40 miles down the 77-Willow Freeway from Cleveland. His family and buddies are there, from childhood through his Cavalier days. As he wrote in his new Sports Illustrated essay up today:

“Before anyone ever cared where I would play basketball, I was a kid from Northeast Ohio. It’s where I walked. It’s where I ran. It’s where I cried. It’s where I bled. It holds a special place in my heart. People there have seen me grow up. I sometimes feel like I’m their son. Their passion can be overwhelming. But it drives me. I want to give them hope when I can. I want to inspire them when I can. My relationship with Northeast Ohio is bigger than basketball. I didn’t realize that four years ago. I do now.”

So once again, Taxifornia loses a potential championship.

 

9 comments

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  1. Ed Keating
    Ed Keating 11 July, 2014, 14:32

    In fairness, state income tax rates present an over-simplified portrayal of how much an athlete or entertainer ends up paying in income taxes.

    Mr. James’ (or any athlete’s or entertainer’s) salary is pro-rated across the states in which he plays/performs. It’s very complex to keep track of; not something an athlete would do in his or her spare time.

    It is the case that Mr. James will end up paying more in state income taxation because he’ll play half his home games in Ohio versus Florida. But the net effect is complicated to estimate; you’d have to compare the two teams’ road schedules.

    We civilians, incidentally, should feel thankful that we don’t have to prorate our income taxes based on where we might travel for occasional business trips!

    Reply this comment
  2. Queeg
    Queeg 11 July, 2014, 19:10

    Who cares…

    You have millions of exploited, low information, low skilled and young workers in California who cannot afford to house themselves, and you worry about basketball players!!!!!!!

    Pitiful

    Reply this comment
  3. SeeSaw
    SeeSaw 12 July, 2014, 10:12

    People in the types of income brackets inhabited by those in the category of Lebron James and other multi-millionaire players do not have to worry about the tax takes of any state they play in or live in. I’m sure that taxation did not even enter into the picture while he was making his decision. Players of his ilk have agents, lawyers, and accountants that set them up so that most of their income is deferred compensation that they will have to enjoy, when they cannot play any more.

    Enough worrying about the rich. I worry about those who struggle every day to feed and clothe their families and pay the utility bills. Those people exist in higher numbers than the rich. Why aren’t we more concerned about the income disparity between the uber-rich and the average citizens?

    California’s taxation policies are very reasonable and fair. It does not tax SS income like the feds do and it is very liberal with credits–giving double credits to those over age 65, and blind, etc. CA has a very fair standard deduction for taxpayers and, again, gives a bonus deduction to those over 65. My spouse and I paid a state income tax tab of $1850 for 2014, and our income fell into the lower, middle-class bracket. I think that is a fair amount of taxation for the priviledge of living in this great state and partaking of the public services afforded.

    Reply this comment
  4. Richard Rider
    Richard Rider 13 July, 2014, 11:56

    SeeSaw — Yes, California, like the feds, has a very progressive tax structure. About 40% pay ZERO state income tax, or even get money back in credits if they have a family (like the EITC federal credits). So yes, the CA state income tax is very reasonable for YOU and many others, but is uber-high for the wealthy.

    Deferred compensation programs do NOT reduce the tax for the wealthy — they pay full taxes when it is paid out because they are still in the top tax brackets after “retiring.”

    I’m always amused when you lefties rail against the selfish greedy rich wanting to avoid taxes, and go on to state that — when it comes to tax rates — the wealthy don’t care about state tax rate differences.

    Reply this comment
  5. Richard Rider
    Richard Rider 13 July, 2014, 12:01

    If a LeBron James moves to CA, his ENDORSEMENT income is taxed at CA rates. For LeBron, that income stream can be as much or more than his NBA compensation.

    In the coming years, I predict the stately decline of our CA pro sports teams, as landing the top free agents will become more and more difficult. LA (and perhaps SF players) may be somewhat immune to this trend because of more lucrative endorsement opportunities, but San Diego, Oakland and Sacramento teams will not be able to offset this tax disadvantage.

    Reply this comment
  6. S Moderation Douglas
    S Moderation Douglas 13 July, 2014, 14:06

    California *income* tax is very progressive, but the total effective state and local taxes, not so much.

    The effective state plus local tax burden for California’s highest earners is LOWER than the national average for all income groups.

    It is true, though, as I recall, that, comparing just the highest quintile of earners in all states, California’s state/local burden is the highest. Sometimes almost insanely higher.

    As a rule, when you see a study showing the “ten states with lowest taxes”, that usually means lowest taxes for the richest residents. In many of those states, lower and middle income pay higher state and local taxes as a percentage of income than they would in “high tax” states.

    Another rule, “low tax” states often are net receivers of federal funds.

    “Look at us, we don’t tax our residents as much as California does.”

    “And we’re more than happy to accept federal money from those that DO tax higher.”

    Reply this comment
  7. Ulysses Uhaul
    Ulysses Uhaul 13 July, 2014, 17:37

    Stop worry doomsies….

    Exhausting reading these sorrowful posts…..enjoy life…..the Democrats will rule another 100 years.

    Thank the goose steeping righties who gave us Prop 187…….boxcar loads of immigrants to the border!

    Reply this comment
  8. SeeSaw
    SeeSaw 13 July, 2014, 18:13

    I am not a, “lefty”, Richard Rider. I am a moderate, just left of that center line–the place where I think most citizens should be. I am the average low-middle, to medium-middle class resident of CA. Please refrain from emphasizing the word, “YOU”, when you refer to me. I am on the side of the majority of the citizens–not a, “righty, fighting for the rich, like you.

    Reply this comment
  9. Queeg
    Queeg 13 July, 2014, 19:22

    Saw,

    You’re people that made America great. Appreciate the frankness!

    Truth tellers are few in life.

    Reply this comment

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