FanPost

Pro Sports and Taxes




An interesting article was published today on the Yankees signing Masahiro Tanaka and the tax ramifications Tanaka will face by deciding to play in New York as opposed to the Cubs or Diamondbacks.

Taxes

Too bad the article does not include comparisons including Texas, California or Florida.

I thought it was a timely piece given that FA is about to get under way and it will be very interesting to see where the Raiders may fall short with a few candidates. If the Raiders lose out on an FA what will be the reasons? Player wants to go to a team that is closer to competing for a championship? Has ties to the coaching staff of new team? Perhaps it is all about the $jing$.

If it's about the money, taxes could play a role into whether or not a player decides to play in California or Illinois, which have relatively similar tax profiles, or Texas and Florida which would net the player much more income after taxes.

In the case of Tanaka, his decision to play in NY is costing him $12 million (this number would be much larger if he was considering a team in Texas or Florida as there is no state income tax)... That's a big number that a savvy GM could use in negotiations if he was on his game. Team executives and agents are more than aware of what role taxes play in a players financial future. While there are many factors players consider when signing a new contract, the article on Tanaka underscores the effect local taxes can have on FA negotiations.

If the Raiders get into some competitive bidding during the upcoming FA period and can land a player who was considering HOU/DAL/MIA/TB without having to considerably overpay I will be quite happy. Playing in California is more of a burden than some folks may realize. When these guys are grinding out the numbers OAK/SD and SF are at a distinct disadvantage in many cases.

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