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LeBron could make more money in Miami than Cleveland – thank you state taxes

Jul 8, 2010, 12:10 PM EDT

nba_james2_250.jpgLife in Miami is good. Warm weather all year around. Great beaches. Amazing clubs. Fantastic restaurants. Beautiful people. LeBron James has to be enticed by all that.

Plus he would make more money in Miami.

Yes, Cleveland can pay him more, for the first five years of the contract that comes to about $4 million more. But once you figure in state taxes, as Darren Rovell did at CNBC, Florida comes out on top because it doesn’t have any.

Playing in Cleveland, LeBron would face a state income tax of 5.925 percent, plus a Cleveland city tax of two percent.

Over the first five years of a new contract with Cleveland, James would give back $3,953,060 combined to the state and city for the 41 games each season he’d play at home. But James would have to pay none of that for home games in Miami since Florida doesn’t have an income tax.

Athletes have to pay income taxes to states that they play in on the road, so the games he’ll play away from home — whether he played for Cleveland or Miami — are essentially a wash. But there are, on average, 11 away games per season where James would have to pay Ohio and Cleveland taxes. Why? Because he has to pay when he plays in the six areas – Florida, Texas, Washington D.C., Illinois, Toronto and Tennessee – that have no jock taxes.

That’s another $1,061,128 he’ll have to pay in taxes that he wouldn’t have to pay in Miami.

That is about $5 million saved in state taxes the first five years, which is more than the $4 million more Cleveland can pay.

This ignores the sixth year, however. Cleveland, as the home team, can offer that sixth year and Miami can’t, and that one year would be more than $23 million. Factor that in and the numbers change.

But for the first five years of the deal, Miami gives you more take-home pay after taxes. Plus, beautiful people and beaches.

  1. jk - Jul 8, 2010 at 12:25 PM

    Who gives a sh!+

  2. bh - Jul 8, 2010 at 12:38 PM

    I’m with JK…indeed! who gives a S**T.I hate to think what history will say about a culture that pays $20M a year to ball players and lets teachers, policemen, and firefighters, etc. work and risk their lives for a comparable pittance.

  3. Jared - Jul 8, 2010 at 12:49 PM

    But…… but………..he’s the chosen one.

  4. starang - Jul 8, 2010 at 12:59 PM

    LOL. bh, do you see the irony? You browsed and opened the article, so you are obviously a part of why players make what they do.
    Whens the last time you browsed for which teacher was going to which school next year?

  5. leon - Jul 8, 2010 at 1:38 PM

    I will agree teachers police are under paid but, if he is being paid millions its becuase he will make his owners much much much more. now lets get back to BASKETBALL

  6. Another BH - Jul 8, 2010 at 2:00 PM

    Agreed with Starang. This argument, as often as we see it from all kinds of sources, it completely without merit. Professional athletes who play popular sports are entertainers. We all pay out of our pockets to be entertained.
    bh, I doubt you’d pay $150 for 2 tickets to the next local PTA meeting. Most people wouldn’t. But plenty of people pay that and a lot more to watch live sporting events. Not to mention endorsements. If people didn’t buy things because their favorite athletes endorsed them, companies wouldn’t pay them millions for their endorsement. Would you be more likely to buy a shoe if your favorite basketball player endorsed it, or if the National Teacher of the Year endorsed it?
    The bottom line is, sure its frustrating for a lot of people that athletes make millions more than most will ever sniff just because of god-given talent. But there is a very good reason they get paid what they do. There are tons of things in the world to be upset about that are much more meaningful than this. Let’s worry about fixing those things that actually need to be fixed.

  7. Nick - Jul 8, 2010 at 2:01 PM

    Too bad this article is forgetting about other taxes such as expensive property tax in Florida…Florida makes up their tax money in other ways. Cost of living is MUCH more in Florida than in CLeveland Ohio.

  8. jbrax - Jul 8, 2010 at 4:53 PM

    Lets be real, if I could afford it I would live in Miami.

  9. Ned Ludd - Jul 8, 2010 at 5:54 PM

    This ignores the fact the state tax is fully deductible on your FIT. The “after all taxes” effect is only about half that when you take Federal taxes into account into account.
    BTW, I hate Florida, but while it may cost more than Ohio, it’s way cheaper than NYC or LA.

  10. Anonymous - Jul 8, 2010 at 6:01 PM

    Good God, Nobody “Let’s” Police, Teachers, and firemen risk their lives. They CHOOSE to do it. And the average teacher in my state makes 79k, gets 3 months off every year, and gets to retire with a full pension after only 20 years. In my opinion that is what is ludicrous.
    If a teacher, policeman, or fireman could sell out 20,000 seats @ an average of $75 a ticket 41 times a year they would make alot more money. That is 61.5 million in revenue just from ticket sales. Plus sponsors and endorsements, you can tack on another 25 million a year.
    If a teacher, policeman, or fireman could do that, I would say pay them for the revenue they bring in, oh yeah they do not bring in any revenue they cost the taxpayer billions, soon to be trillions, and all we get is an out of control drop out rate, and a skyrocketing crime rate.
    So, if you would like to talk about being overpaid, bad teachers making nearly double the national average isnt enough? Wake up. This isnt about sentiment, its about reality.

  11. PissOnYourFace - Jul 8, 2010 at 7:10 PM

    You all just got OWNED by an anonymous person

  12. King James - Jul 8, 2010 at 11:01 PM

    You are all idoits. ball players make what they do because society idolizes all of the big names. Jeter, James, Kobe, Reggie Bush… just a few of the many out there. and the reason they make the money they do is because their names bring the city they play for economic resources. think of all the money spent on tickets, merchandise etc… all of this is taxed and that tax goes to the government which then boosts the economy. LeBron is getting paid millions because hes going to double that for whatever town he plays for. however teachers do not bring economic outpour to their cities. and im not saying that what they do isnt good, they serve a great role in society but in the grand scheme of things a teacher in the slums of Miami wont help the local area with his or her social security tax, but LeBron’s $1,000,000 tax to the state will definitely help possibly build that teacher a new facility of God forbid a basketball gym.

  13. Jay - Jul 9, 2010 at 12:27 PM

    Miami is the end zone for life– full of old people waiting to die.
    Sure there are some ‘beautiful’ people on South Beach — If Ed Hardy, euro-cut bootleg jeans and techno music is your style.
    The weather also sucks — if you like torrential rain everyday all summer steaming off the pavement with 100% humidity in 100 degree heat. Most people just hermit inside with their air conditioning — since you can’t actually do anything physical outside unless your parked 50 feet from the ocean.
    Sorry aside from a few nice parts — most of Miami is a complete dump. Crime ridden and full of non English speaking Cuban immigrants.

  14. roadrunner - Jul 11, 2010 at 10:42 PM

    Hey anonymous you hit it right on the money.The problem with this situation is that all the people that wrote above you are jellouse of miami and scared of loosing,that’s the bottom line.

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