Ask anyone who’s ever moved from Texas to New York: the local income tax difference can take a bite. Given that, rumors that James Harden is interested in moving from his NBA home at the Houston Rockets to the Brooklyn Nets have some familiar tax implications for Harden, as sports business site Sportico reports, and if he decides to make the move, he’ll be facing a tax bill of almost $14 million.
The Rockets are reportedly willing to spend an unprecedented amount of money to keep Harden on-board, offering $133 million over the three years still left on his contract, plus a $103 million two-year extension reported by ESPN. Had he not turned it down, that extension would have made Harden the first player in NBA history to make more than $50 million for a single season, and he’d be making it for two seasons in a row, guaranteed.
Harden will make $133 million over the next three years no matter what team he’s playing for, but if the Nets can’t or don’t match the extension reportedly offered by Houston, Harden would naturally be agreeing to pay for less money. But that’s only one of the financial downsides that he might be facing, since the tax situations in the respective states couldn’t be more different. Texas is one of the few states that has no state income tax, while New York State and New York City both have their own tax rates which come to a combined 12.7 percent. Assuming he’d be living somewhere in New York City, his income would be subject to those not-insignificant taxes, plus the “jock taxes” that players incur when they play out-of-town games.
All told, if Harden decided to move to New York City to play for the Nets, he’d be looking at about $13.6 million in extra taxes compared to where he is now. There are other financial factors to consider as well, such as New York’s relatively high cost of living compared to Texas, but that’s not likely to add up to as significant a sum given the amount of money involved. Harden could also make up the difference with more endorsement opportunities, since New York is the biggest media market in the country and a spot on the Nets’ roster would raise his profile even more. And of course, when you’ve earned as much money as Harden has over the course of his extremely lucrative career, you can afford to make decisions for reasons other than money.
Read the original article onAhram Online