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For millionaire athletes, states with highest tax rates may not make the cut

Home - by - January 31, 2013 - 08:45 America/New_York - 11 Comments

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Is Lefty’s stance on California’s tax hikes a sign of things to come for millionaire athletes?

The Golden State’s new 13.3 percent income tax on top earners prompted golfer Phil Mickelson to say earlier this month he was considering a move, and according to the accountants who advise millionaire athletes, he was just saying what a lot of jocks were already thinking. Federal taxes on the top income bracket just rose by roughly 5 percent, and, while there’s nothing rich athletes can do about that, they are paying attention to which states dip into their game checks — and how much they take.

“They’re going to have an exodus of people,” said John Karaffa, president of ProSport CPA, a Virginia-based firm that represents nearly 300 professional athletes, primarily in basketball and football. “I think they’ll see some [leave California] for sure. They were already a very high tax state and it’s getting to a point where folks have to make a business decision as well as a lifestyle decision.”

The taxes of professional athletes became incredibly complicated in the early 1990s, when aggressive state and local tax collectors began targeting them to pay non-resident income taxes. Technically, all employees who earn money for work done outside their home states have to pay non-resident taxes, but enforcement has focused on millionaire athletes with publicized work schedules to the extent is is commonly called the “jock tax.” Although ballplayers can’t get out of the state and local taxes they pay while on the road, where they play their home games can make a huge difference. California takes 13.3 percent on income above $1 million, but states like Florida, Nevada and Texas are among seven that take nothing.

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» 11 Comments

  1. Edith McCrotch

    January 31st, 2013

    “We’re not, we’re not trying to push financial reform because we begrudge success that’s fairly earned. I mean, I do think at a certain point you’ve made enough money.”

    Barack Obama, April 29, 2010

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  2. hanoverfist

    January 31st, 2013

    …primarily in basketball and football….

    Thugs want to keep their money too ya know.

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  3. Chieftain

    January 31st, 2013

    The problem is that even if someone moved out of Kallyfornea, the income they earn in the state is still taxable, and that could be even higher if you are filing as an out-of-state resident.

    Complex problem that poor and uninformed decisions can easily make worse. Instead of trying to run away from their financial problems (the same way some of these athletes run away from their many bastard spawn) it would be refreshing to see them stay, shed the liberalism and start acting like a responsible voter and taxpayer.

    But the roadblock to that fantasy is that the State legislatures don’t mean squat any more and haven’t since they lost the right to appoint US Senators to represent the States when the 17th Amendment was passed. Repeal the 17th, and give the States their teeth back, and then we can begin to see some real progress. Making legislators responsible to something other than one of two political parties would be a good start…

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  4. Left Coast Dan

    January 31st, 2013

    I am trying to stay in CA, but now that both chambers have a Dem supermajority there will be a slew of new taxes in the next two years. They are already submitting proposals, and they know they may not have the chance after 2014.

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  5. Stirrin the B.S.

    January 31st, 2013

    @LC Dan – you raise a pertinent point. I don’t know your financial situation, but the extremely wealthy – especially those who don’t go to an office everyday – have the ability to pick up and move to a more tax-friendly state. The wealthy have mobility.

    The working stiffs, for the most part, are left behind to shoulder the burden of their irresponsible state politicians. And a LOT of them are democrats – when will they ever learn?

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  6. kvn

    January 31st, 2013

    Living in a small town in tax free Florida, I see many athletes, coaches and TV people every day.

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  7. Boobie the Rocket Dog

    January 31st, 2013

    Florida has three NFL teams, four NBA teams, two (?) hockey teams, two baseball teams.

    COME ON DOWN! But leave your lib politics behind.

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  8. kvn

    January 31st, 2013

    Mr. Rocket Dog, yes 2 NHL teams – Lightning and Panthers. And arguably the best coach hockey ever had, Scotty Bowman. The tallest man to ever play hockey lives down the street from me. The guy is 6’9″ tall!!!

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  9. Boobie the Rocket Dog

    January 31st, 2013

    @ kvn- Custom stick, I take it!

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  10. Maudie N Mandeville

    January 31st, 2013

    The professional athletes may flee those hi tax states, but every black one voted and will continue to vote Obama. Each of these thugs persecutes the poor, minorities, women and children but are too ignorant to figure it out.

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  11. Doug Turski

    January 31st, 2013

    I have several clients that are athletes considering moving out of Calif, costing more to live in cal.

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