A $10 million MLB player living and playing in Florida will pay half a million more in Obama taxes in 2013, AP
"Team executives and agents wandered into the Agave Sunset lounge at the resort where the general managers' meetings were held in Indian Wells, Calif. Four of the six flat-screen televisions were showing election coverage, with the other two turned to sports.
President Barack Obama's victory over Mitt Romney was of as much interest to baseball's money men as the game scores, given the millions of dollars routinely guaranteed in player contracts these days.
As free agents negotiate deals this offseason, tax policy is an area that comes up along with the usual issues. Some players are wrangling for as much money as they can get before the end of the year to avoid a take hike in 2013.
"Front-loading would make sense if at all possible as tax rates will definitely go up on January 1st on all high-income taxpayers," agent Greg Genske said in an email. "The only question is HOW MUCH will the rates increase????"
This much is known for now: Starting Jan. 1, there is an additional
- 0.9 percent Medicare tax on wages above $200,000 for individuals and $250,000 for married couples filing jointly
- under the federal Affordable Care Act, a rise to 2.35 percent.
With baseball contracts worth as much as $275 million (Alex Rodriguez) and the major league minimum $480,000, tax policy affects every player who spends most of the season in the big leagues.
All-Star shortstop Jose Reyes, who has a $10 million salary next year, was traded from the Miami Marlins to the Toronto Blue Jays. While Florida has no state income tax, Reyes remains a New York resident from his days with the Mets and had high taxes to begin with.
- Ontario's provincial tax rises to 11.16 percent — on top of a Canadian federal level as high as 29 percent.
- 10.3 percent in California and 8.82 percent in New York.
- rate in the District of Columbia is 8.95 percent.
According to an analysis done by a tax lawyer on the staff of agent Scott Boras, a player with a $10 million salary and average deductions who plays in Florida and is a resident of that state will see his taxes rise
- from $3.45 million this year to $4.09 million next year
- to a California team,
- the tax would go up to $4.4 million.
"Tax measures are going to be discussed, but change most likely carries compromise on both sides," Boras said. "One thing is clear based on the nation's ballot totals: Many Americans are split on this subject."
In the end, most free agents choose teams based on where they want to play, not on lowering the tax cut on their income.
"It's a factor, maybe even a small factor," agent Craig Landis said. "If there's 50 variables, you can now make it a 51st. It's not usually going to be the drive, but it's something to consider."
And for teams, only the big spenders need worry."... via Drudge
Tweet Stumbleupon StumbleUpon