How Much Did California Taxes Affect NBA Free Agency?

The NBA finals are now in the rear view mirror, as is the league’s draft. In fact, the free agency period has largely ended as well, as far as the big-time impact players are concerned. It was an unusual year for free agency, as some of the most recognizable and marketable teams were mostly shut out in the free agent frenzy, including the New York Knicks and Los Angeles Lakers.

The Warriors and Clippers were able to keep their big name players that could have flown the coup for so-called greener pastures, but one of the most successful franchises in the history of the game could not get anyone to bite. Could it be that the Lakers have completely lost their mojo? That’s a debate for the sports experts, but what is up for open debate is whether or not California’s taxes played a role in where players chose, or didn’t choose to sign.

There are several possible reasons that this year’s crop of free agents could have chosen other teams besides the Lakers. However, there is also a definite possibility that the state’s huge income tax rate had something to do with it. California has the nation’s highest state income tax at 13.3 percent. Could that have been a deciding factor for some of these athletes? We can’t know for sure, but when you look at the case of free agent forward LaMarcus Aldridge, you can’t help but wonder.

Aldridge left the Portland Trailblazers for the San Antonio Spurs. Aldridge twice met with the Lakers before ultimately selecting San Antonio. The difference in his tax bill is huge when you consider that Texas has no state income tax. At four years and $80 Aldridge would’ve paid roughly $10 million in state income taxes had he signed with the Lakers. That’s a huge difference. While Aldridge may have chosen the Spurs for many other reasons, it’s very likely that the tax equation had something to do with his decision.

Posted in
Tips for the Self Employed in Avoiding an IRS Audit

Dealing with IRS Collections

Dealing with IRS Collections There are times when taxpayers are unable to pay amounts owed the IRS on a tax return or as a result of an audit. Presuming there is no disagreement about the tax liability, just a lack of funds to pay, the taxpayer is best served by avoiding the collection process. There…

Real Home Buyer; Tax Time Tips for Mortgage Holders

Tax Time Tips for Mortgage Holders

Tax Time Tips for Mortgage Holders Tax Time Tips for Mortgage Holders, it’s that time of year again when numbers such as 1040, W-2 and INT-1099 become all too familiar to millions of people. One of the benefits of holding a mortgage on your house is the ability to claim certain deductions that can assist…

Will NBA Star Choose New Team According to State Taxes?

CA Credit for New Home Purchase – Fund Running Out

CA Credit for New Home Purchase – Fund Running Out By Ron Cohen, CPA, MST Partner Greenstein, Rogoff, Olsen & Co., LLP California allows a nonrefundable credit against net tax equal to the lesser of 5% (.05) of the purchase price of the qualified principal residence or ten thousand dollars ($10,000). But only a limited amount…

More Work for Accountants! President Obama’s Corporate Tax Proposal

More Work for Accountants! President Obama’s Corporate Tax Proposal

More Work for Accountants! President Obama’s Corporate Tax Proposal By Ron Cohen, CPA, MST Partner Greenstein, Rogoff, Olsen & Co., LLP In the White House summary of corporate tax proposals: http://media.npr.org/documents/2009/may/whitehouse_taxhavens.pdf At “Backgrounder” Article I. Sec. 1, it states: “Current Law Companies Can Defer Paying Taxes on Overseas Profits Until Later, While Taking Tax Deductions…