Jul 8, 2010, 12:10 PM EDT
Life 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.
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