SportsProf

(Hopefully) good sports essays and observations for good sports by a guy who tries (and can sometimes fail) to be a good sport.

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Saturday, July 10, 2010

Taxation Affects Behavior Department: LeBron James

The Wall Street Journal opined on its editorial page that while it wasn't there to bury or praise LeBron, it had to note that Florida has no state income tax, while Ohio has a 7% state income tax for earners like LeBron and that New York's and New Jersey's are even higher (you'll recall that those states are home to two of LeBron's suitors, the Knicks and the Nets). So, if LeBron makes say $40 million a year with salary and endorsements, he'll save a considerable amount over his five-year deal with the Heat by establishing Florida as his residence. Believe it or not, I'm sure that this figured into LeBron's decision, especially because he'll be getting less salary from the Heat than he could have in Cleveland. (Of course, this calls the question as to LeBron's endorsement value given the two spectacles that occured, the one in Connecticut where he announced his decision and the "welcome" party that was held in Miami last night). So, even if the endorsements don't make the fellow a world icon (and a host on WFAN in New York this morning said that he'll now play Scottie Pippen to Dwayne Wade's Michael Jordan in Miami), he'll still have over $10 million in tax savings by joining the Heat.

Memo to all professional sports teams seeking free agents -- it's best to be in a low- or no-tax state.

And LeBron is very financially savvy, too.

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