Matt Blumenfeld

Cost of Government: How Many NFL Games Are Needed to Pay Home Game State Tax Liability?


Posted by Matt Blumenfeld on Thursday, August 1st, 2013, 9:04 AM PERMALINK


With training camp for each of the NFL’s franchises underway, rookies and veterans have signed lucrative contracts with new or current teams around the league. While many first-year players join their new team expecting to make millions in their professional debuts, the truth of the matter is the part of their paycheck for their first game will go directly to the state tax collectors.

As Americans for Tax Reform points out in the chart below, NFL players can expect the state to collect taxes from the first few quarters of their first home game of the regular season before they begin to keep their earnings. Some of key findings include:

  • NFL players in California must play one game and a quarter into their second home game just to pay off their home game state tax liability.
  • The Minnesota Vikings have the second highest tax rate – 9.85 percent – due to Gov. Dayton’s recent income tax hike.
  • Players on teams based in Florida, Tennessee, Texas, and Washington are able to keep their earnings from the start of the regular season due to no state income tax.

State

Team(s)

Combined State and Local Income Tax Rate

Home Games Played to Pay State Tax Liability

Ariz.

Cardinals

4.54%

2 quarters

Calif.

49ers

Chargers

Raiders

13.3%

1 Game + Half a quarter

Colo.

Broncos

4.63% + $5.75 per month on income earned over $500 in Denver

2 quarters

Fla.

Buccaneers

Dolphins

Jaguars

0%

0 Games

Ga.

Falcons

6%

2 quarters

Ill.

Bears

5%

2 quarters

Ind.

Colts

3.4%

1 quarter

La.

Saints

6%

2 quarters

Md.

Ravens

Redskins

8.8%

7.822%

3 quarters

3 quarters

Mass.

Patriots

5.25%

2 quarters

Mich.

Lions

5.5%

2 quarters

Minn.

Vikings

9.85%

3 quarters

Mo.

Chiefs

Rams

7%

7%

2 quarters

2 quarters

N.J.

Giants

Jets

8.97%

8.97%

3 quarters

3 quarters

N.Y.

Bills

8.82%

3 quarters

N.C.

Panthers

7.75%

3 quarters

Ohio

Bengals

Browns

8.025%

7.925%

3 quarters

3 quarters

Pa.

Eagles

Steelers

7.05%

6.07%

2 quarters

2 quarters

Tenn.

Titans

0%

0 Games

Texas

Cowboys

Texans

0%

0 Games

Wash.

Seahawks

0%

0 Games

Wis.

Packers

7.75%

3 quarters

For illustrative purposes, the combined state and local income tax rate multiplied by the number of regular season home games equals the number of games that need to be played to pay off state tax liability.

As seen above, NFL players on California-based teams must play one full game before they can begin to earn a paycheck that does not go straight towards paying their state income tax liability. Conversely, players in no-income-tax states are able to keep their earnings with the first kick-off of the regular season. With states such as Florida, Texas, Tennessee, and Washington leading the way in economic competitiveness, more players will begin to factor state income tax rates with respect to signing with new teams.

The same competitive forces impact the everyday, economic decisions of businesses and taxpayers. Individuals continue to flee high-income-tax states such as California, Illinois, and New York in favor of pro-growth, pro-job creation states.

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Cost of Government: How Many NBA Games Are Needed to Pay Home Game Tax Liability?


Posted by Matt Blumenfeld on Wednesday, July 24th, 2013, 9:15 AM PERMALINK


With the NBA’s summer league and free agency underway, rookies and veterans will be signing lucrative contracts with new teams around the league. While many first-year players join their new squads expecting to make millions in their professional debuts, the truth of the matter is the paychecks for their first few games will most likely be handed directly to the state tax collectors.

As Americans for Tax Reform points out in the chart below, NBA players can expect the state to collect taxes from the first few home games before they begin to keep their earnings. Some of key findings include:

  • NBA players on California-based teams must play the most games – five and a half – to pay off home game tax liability.
  • The Portland Trail Blazers have the second highest tax rate – 10.53 percent - due to a city income tax liability.
  • Players on teams based in Florida, Texas, and Tennessee are able to keep their earnings from the start of the regular season.

State

Team(s)

Combined State and Local Income Tax Rate

Home Games Played to Pay State Tax Liability

California

Clippers

Kings

Lakers

Warriors

13.3%

5.5 games

Oregon

Trail Blazers

10.53%

4.3 games

Minnesota

Timberwolves

9.85%

4 games

District of Columbia

Wizards

8.95%

3.7 games

New York

Knicks

Nets

8.82%

3.6 games

Ohio

Cavaliers

7.93%

3.3 games

Wisconsin

Bucks

7.75%

3.2 games

Pennsylvania

76ers

7.05%

2.9 games

Louisiana

Pelicans

6%

2.5 games

Georgia

Hawks

6%

2.5 games

North Carolina

Bobcats

5.75%

2.4 games

Michigan

Pistons

5.5%

2.3 games

Massachusetts

Celtics

5.25%

2.2 games

Oklahoma

Thunder

5.25%

2.2 games

Illinois

Bulls

5%

2.1 games

Utah

Jazz

5%

2.1 games

Colorado

Nuggets

4.63% + $5.75 per month on income earned over $500

1.9 games

Arizona

Suns

4.54%

1.8  games

Indiana

Pacers

3.4%

1.4 games

Texas

Mavericks

Rockets

Spurs

0%

0 games

Florida

Heat

Magic

0%

0 games

Tennessee

Grizzlies

0%

0 games

 

 

 

 

For illustrative purposes, the Toronto Raptors are not included due to being headquartered in Ontario Canada where a different tax code is used. The combined state and local income tax rate multiplied by the number of regular season home games equals the number of games that need to be played to pay off state tax liability.

As seen above, NBA players on California-based teams must play five and a half games before they can begin to earn a paycheck that does not go straight towards paying their state income tax liabilities. Conversely, players in no-income-tax states are able to keep their earnings from the start of the regular season. With states such as Florida, Texas, and Tennessee leading the way in economic competitiveness, more players will begin to factor state income tax rates with respect to signing with new teams. As is the case with former Los Angeles Laker Dwight Howard signing with the Houston Rockets, players will see their tax burdens decrease, allowing them to increase their take-home pay.

The same competitive forces impact the everyday, economic decisions of businesses and taxpayers. Individuals continue to flee high-income-tax states such as California, Illinois, and New York in favor of pro-growth, pro-job creation states.

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Forbes: Phil Mickelson Wins First British Open, Incurs 61% Tax Rate


Posted by Matt Blumenfeld on Tuesday, July 23rd, 2013, 4:29 PM PERMALINK


Over the weekend, Phil Mickelson won the Scottish Open and the Open Championship. While winning even one PGA event is a tremendous feat, Mickelson won’t be left with much to celebrate upon his return from the U.K.

In his recent Forbes article, K. Sean Packard, CPA (Director of Tax at OFS), claims the golfer commonly referred to as “Lefty” by golf fans around the world can expect his tax liability on his earnings during the past two weeks – a total of $2,167,500 - to be a whopping 61 percent.

Without considering expenses, Mickelson will pay 61.12% taxes on his winnings, bringing his net take-home winnings to about $842,700. When expenses are considered (10% to caddy Jim “Bones” Mackay, airfare, hotel, meals, agent fees on endorsement income/bonuses—all tax deductible here and in the UK), his take-home will fall closer to 30%.

Non-resident athletes competing in the United Kingdom are also subject to being taxed on their endorsement income. It should also be noted that California does not have a foreign tax credit, thus leaving Mickelson on the hook to pay the Golden State’s top marginal income tax rate of 13.3 percent.

With an overwhelming majority of his earnings going straight to the tax collectors, will this be the last time “Lefty” competes on British soil?

More importantly, will Mickelson now look to join Tiger Woods as the latest golfer to flee the West Coast in favor of no-income-tax Florida? All indicators would point to a resounding yes. 

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Big Labor Front Group Wants Obamacare Shoved Down NFL Fans' Throats


Posted by Matt Blumenfeld on Thursday, July 18th, 2013, 2:03 PM PERMALINK


In response to the recent announcement that the NFL would not be partnering with HHS to promote the Obamacare healthcare law, an outfit called “Moms Rising” – a Big Labor front group (check out their policy priorities and lack of mailing address) – has begun circulating a petition to get the league to reconsider its decision.  As one “disgusted” Seattle Seahawks fan named Donna stated in an email to the pro-Obamacare group, “they [the NFL] should have the courage to stand up to this handful of elected officials and let them know people are more important than the petty politics of Congress.”  If anything “disgusts” this Seahawks fan, it should be the fact that individual health insurance premiums in the state of Washington will increase by 34 – 80 percent under Obamacare. Something for Donna and other Seattle fans to consider while watching Russell Wilson and company try to take the NFC by storm this season.

The Big Labor group sponsoring Moms Rising should join their fellow union groups in advocating for the abolishment of the detrimental healthcare law. In a joint letter to Congress signed by Jimmy Hoffa (President, Teamsters), Joseph Hansen (President, The United Food and Commercial Workers International Union), and D. Taylor (President, Union of Needletrades, Industrial, and Textile Employees- Hotel Employees and Restaurant Employees International Union), the leaders of three of the largest U.S. unions warned Democratic leaders the President’s healthcare law will “destroy the foundation of the 40 hour work week that is the backbone of the American middle class.” They went further to say :

“The unintended consequences of the ACA are severe… Perverse incentives are causing nightmare scenarios. First, the law creates an incentive for employers to keep employees’ work hours below 30 hours a week. Numerous employers have begun to cut workers’ hours to avoid this obligation, and many of them are doing so openly. The impact is two-fold: fewer hours means less pay while also losing our current health benefits.”

According to the U.S. Department of Labor, women make approximately 80 percent of the healthcare decisions for families. With that in mind, Ryan Ellis, Director of Tax Policy for Americans for Tax Reform, points out in his 2012 Daily Caller piece, “The Obamacare law contains 20 new or higher taxes. Many of these taxes fall on basic healthcare decisions. Thus, the Obamacare tax hikes on healthcare will disproportionately burden women.”  Two of the most detrimental tax hikes contained in the controversial healthcare law especially harm families with special needs children and families facing high out-of-pocket medical expenses . Even professional athletes from the major sports leagues HHS and the Obama administration want to use to promote Obamacare will incur higher tax rates.

Promoting Obamacare would be a personal foul against the fans and taxpayers who tune in to watch their favorite team and athletes each season.

ATR applauds the NFL for having the courage to stand up to the petty politics of the Obama administration.

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The Decision: NBA's Dwight Howard Chooses No State Income Tax Texas Over California


Posted by Matt Blumenfeld on Tuesday, July 9th, 2013, 4:54 PM PERMALINK


Dwight Howard informed the Los Angeles Lakers on Saturday that he would not be signing with the famed basketball franchise, instead choosing to become the newest member of the Houston Rockets. Whether Mr. Howard will experience more success as a Rocket than a Laker is yet to be seen, but the All-Star center can rest assured that he will earn more for his efforts in Texas rather than California.

Had Howard decided to remain with the Lakers, he could have received a max contract of $119 million over five years. Houston, on the other hand, can only offer a max contract of $88 million over four years under the new rules of the Collective Bargaining Agreement. While the difference in pay is one year and $31 million, Howard will actually earn $2.1 million more after taxes by signing with Houston:

Team

Total

Tax Burden

Total

Tax Liability

Annual

After-Tax Earnings

Houston Rockets

43.4%

$9.6 million

$12.4 million

Los Angeles Lakers

56.7%

$13.5 million

$10.3 million

For illustrative purposes, the total tax burden is comprised of the top marginal federal income tax rate of 39.6 percent plus the 3.8 percent Medicare surtax plus the top marginal income tax rate of California (13.3%) and Texas (0%). Additionally, figures based on estimated annual pay from Lakers ($23.8 million per year) and Rockets ($22 million per year).

Additionally, if Howard were to remain in Los Angeles, he would have to hand over his paycheck for five and a half home games to the state of California to cover his state tax liability. By signing with the Rockets, Howard does not have to worry about the state committing a flagrant foul against his earnings.

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NFL and NBA Obamacare Alliance: High Medical Bills Tax Crushes "Home" Team


Posted by Matt Blumenfeld, John Kartch on Friday, June 28th, 2013, 1:16 PM PERMALINK


As reported earlier this week, HHS Secretary Kathleen Sebelius has been engaged in partnership discussions with the NFL and NBA to promote Obamacare.

Before the leagues agree to shill for the despised health care law, they would be wise to take a close look at the impact of its tax provisions. The Obamacare law contains twenty new or higher taxes, including one that will raise income taxes on 10 million middle class families facing high out-of-pocket medical expenses. The average family subject to this new tax makes just over $53,000 and will face an income tax increase of between $200 - $400 per year.

Background: Americans have long been allowed to deduct out of pocket medical expenses as an itemized deduction on their taxes. They cannot have already benefited from other tax provisions for health care like tax-free employer-provided care or tax-free accounts like flexible spending accounts (FSAs) or health savings accounts (HSAs). A full list of qualified expenses can be found in IRS Publication 502.

After totaling all unreimbursed, out-of-pocket medical expenses, the taxpayer must then subtract from this figure an amount equal to 7.5 percent of the taxpayer's adjusted gross income (AGI). This subtraction amount is known commonly as a "haircut."

According to the IRS, 10 million families took advantage of this tax deduction in 2009, the latest year of available data. They deducted $80 billion in medical expenses after applying the “haircut.” The Office of Management and Budget reports that this tax deduction saves these taxpayers upwards of $10 billion annually.

Obamacare's tax hike: The Obamacare law made one change to this tax provision: it raised the "haircut" from 7.5 percent of AGI to 10 percent of AGI. Since virtually all taxpayers claiming this income tax deduction make less than $200,000 per year, the income tax hike falls almost exclusively on the middle class:

-Virtually every family taking this deduction made less than $200,000 in 2009. Over 90 percent earned less than $100,000.

-The average taxpayer claiming this deduction earns just over $53,000 annually.

-ATR estimates that the average income tax increase for the average family claiming this tax benefit will be $200 - $400 per year.

-This income tax increase is focused on families with the largest medical bills that weren't covered by insurance. So the target population is low-and middle-income families with debilitating medical costs. That's a good definition of the opposite of “affordable” or “caring.”

According to the Joint Tax Committee, this tax increase is scheduled to raise between $2 billion and $3 billion annually. That may be a drop in the bucket in Washington DC, but try telling that to the $53,000 family with high medical bills that just saw a tax increase.

The tax is a clear violation of President Obama's "firm pledge" in 2008 to not enact "any form of tax increase" on these families.

Rather than help advocate for a law that raises income taxes on Americans with high medical bills, the NFL and NBA should be standing up for its fans.

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Rep. Steve Scalise: NFL and NBA Should Not be Pressured by HHS to Push Obamacare


Posted by Matt Blumenfeld on Thursday, June 27th, 2013, 4:39 PM PERMALINK


In a letter to NFL Commissioner Roger Goodell and NBA Commissioner David Stern, Congressman Steve Scalise (R-La.) today asked the commissioners of the NFL and NBA for details of their conversations with the Department of Health and Human Services (HHS).  HHS Secretary Kathleen Sebelius this week told reporters, “It’s clear that we’re having discussions, active discussions, right now with a variety of sports affiliates — both in terms of what will end up being paid advertising but hopefully some partnership efforts.”

The text of Rep. Scalise’s letter to Commissioners Goodell and Stern can be found below:

“It has recently come to my attention that your respective leagues have been approached by the U.S. Department of Health and Human Services (HHS) about plans to facilitate and cheer on the implementation of President Obama’s health care law, also known as the Patient Protection and Affordable Care Act (PPACA).  I am writing to learn more about the nature of your conversations with HHS and to alert you to the impact of this law on your fan base.  Considering the recent investigations into reports that Secretary Sebelius has blurred ethical lines by soliciting donations from businesses with matters before her agency in order to help promote components of PPACA, there is a disturbing pattern by the Obama Administration to inappropriately solicit support for their policies by entities that they oversee and regulate.

As you may know, one of the lead Senate architects of PPACA described its implementation as a “train wreck coming down.”  Two recent reports from the Government Accountability Office highlight this train wreck, describing missed deadlines, implementation delays, and programs that are far from ready.  I contend that the effects of this wreck will have a devastating impact on your fans and business partners across the country, many of whom are struggling to make ends meet in these difficult economic times.  Among other effects, this law limits job creation, increases health care costs, discourages business expansion, and restricts access to care.

A recent report shows that your fans and business partners in my state of Louisiana, home to the New Orleans Saints and Pelicans, could face health insurance premium increases of as much as 56 percent. Families and small businesses who decline to purchase or offer government-approved health insurance will be forced to pay exorbitant taxes to the federal government, the likes of which our nation has never seen.

In light of these devastating realities and the recent investigation into actions by Secretary Sebelius to solicit privating funding for the implementation of PPACA, I would like you to provide answers to the following questions:

  1. Has the NFL or the NBA been asked by HHS to contribute funds or in-kind services to any third-party organization aiding in the promotion or implementation of PPACA? If so, please provide details.
  2. Has the NFL or the NBA been asked by HHS to encourage enrollment in the new health insurance exchanges or other aspects of PPACA? If so, please provide details.
  3. Given your previous and ongoing business with HHS and other federal agencies, do you find helping to promote the Obama Administration’s most important legislative priority a potential conflict of interest? Please provide details.

It’s clear that PPACA is not ready for prime time, as even the law’s proponents have recently admitted. Given the harmful impact on millions of your fans and the people of southeast Louisiana, couple with the Obama Administration’s failure to meet the deadlines established to stand up their own law, I would caution you against being coerced into doing their dirty work for them. Please feel free to reach out to me if you have any questions or if you’re uncomfortable responding in writing due to concerns about inappropriate or unwelcomed pressure from the Administration to cooperate with the implementation of PPACA.  I appreciate your prompt response.”

A PDF of the Scalise letter can be found here.

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NFL and NBA Obamacare Alliance: Out of Bounds for Special Needs Children


Posted by Matt Blumenfeld, Ryan Ellis, John Kartch on Tuesday, June 25th, 2013, 11:00 AM PERMALINK


As reported Monday, HHS Secretary Kathleen Sebelius said the NFL “has been very actively and enthusiastically engaged [in Obamacare promotion talks with HHS] because they see health promotion as one of the things that's good for them and good for the country."

This potential partnership between the Obama administration and pro sports leagues - such as the NFL, NBA, MLB, and NHL – to shill for the partisan and controversial Obamacare law should be rejected by the commissioners and players of each league. The Obamacare law contains twenty new or higher taxes, including one that will particularly harm families with special needs children.

Here’s how it works: The 30 - 35 million Americans who use a pre-tax Flexible Spending Account (FSA) at work to pay for their family's basic medical needs face a new Obamacare cap of $2,500. This will squeeze $13 billion of tax money from Americans over the next ten years. (Before Obamacare, the accounts were unlimited under federal law, though employers were allowed to set a cap.) Now, a parent looking to sock away extra money to pay for their family’s medical needs will find themselves quickly hitting this new cap, meaning they would have to pony up some or all of the cost with after-tax dollars. 

Needless to say, this tax will especially impact middle class families.

There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children.  Nationwide there are several million families with special needs children and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. This Obamacare tax provision will limit the options available to these families.

Besides, a fan wants to enjoy watching his favorite team play, not be reminded about how his taxes have gone up.

Rather than help advocate for a law that hikes taxes on families with special needs children, the NFL and NBA should be standing up for its fans.

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NFL and NBA Alliance with Obamacare: A Personal Foul on Taxpayers


Posted by Matt Blumenfeld, Ryan Ellis, John Kartch on Monday, June 24th, 2013, 3:51 PM PERMALINK


Today, HHS Secretary Kathleen Sebelius confirmed that the Obama administration is involved in talks with the NFL and other major sports leagues about enrollment partnerships to advocate for the controversial healthcare law known as Obamacare. As Sebelius said:

“It’s clear that we’re having discussions, active discussions, right now with a variety of sports affiliates — both in terms of what will end up being paid advertising but hopefully some partnership efforts.”

The HHS Secretary also said:

“The NFL for instance, in the conversations that I’ve had, has been very actively and enthusiastically engaged because they see health promotion as one of the things that’s good for them and good for the country.”

Sebelius’ comments confirm a recent Politico report about the NBA and its potential partnership to promote Obamacare. While it is unclear whether prominent players – such as LeBron James, Carmelo Anthony, and Kobe Bryant – would be featured in ad campaigns or whether the NBA logo would be attached to marketing tools, the league and its players should refuse the offer.

For starters, Obamacare is the most partisan and controversial law in the United States. By partnering with the current administration, the NBA would no longer be a sports league devoid of political affiliation or allegiance. Secondly, players featured in potential Obamacare ad campaigns will be advocating for higher taxes on the American public. President Obama has made it clear that he believes Americans should pay more, so why would NBA players advocate a tax hike on themselves? Of the twenty new or higher taxes contained in Obamacare, at least seven hit the middle class (here are the five worst). Athletes are already taxed at the top marginal rate at the federal and state level prior to paying a “jock tax” on away games. Shouldn’t they want their rates lowered rather than increased?

The chart below shows the effect of Obamacare’s Medicare payroll tax rate hike on some of the NBA’s most popular players. The Medicare payroll tax on these players has risen from 2.9 percent to 3.8 percent of their salary (in excess of $200,000 single/$250,000 married) under Obamacare.

Player

Salary

Obamacare Medicare Tax

Kobe Bryant

$27,849,149

$250,642

LeBron James

$17,545,000

$157,905

Kevin Durant

$16,669,629

$150,027

Carmelo Anthony

$19,444,503

$175,001

Derrick Rose

$16,402,500

$147,623

Kevin Garnett

$11,566,265

$104,096

Joakim Noah

$11,300,000

$101,700

Rajon Rondo

$11,000,000

$99,000

Blake Griffin

$7,226,892

$65,042

Kyrie Irving

$5,375,760

$48,382

Tim Duncan

$9,638,554

$86,747

Josh Smith

$13,200,000

$118,800

Deron Williams

$17,177,795

$154,600

Chris Paul

$17,779,458

$160,015

Dwayne Wade

$17,182,000

$154,638

Paul Pierce

$16,790,345

$151,113

Tony Parker

$12,500,000

$112,500

Jeremy Lin

$8,374,646

$75,372

Brandon Jennings

$3,179,493

$28,615

Dirk Nowitzki

$20,907,128

$188,164

*The formula used to calculate Obamacare’s Medicare Tax is the player’s Salary x the 0.9 percent Medicare payroll tax rate hike found within Obamacare. Salaries were found at http://espn.go.com/nba/salaries

The last thing American families want to see while enjoying their favorite sports is a reminder of how much the Obama administration is trying to tax them. Visit atr.org to see all  twenty new or higher taxes in Obamacare

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U.K. Tax Rates Would Sack Potential London-Based NFL Franchise


Posted by Matt Blumenfeld, Ryan Ellis on Thursday, June 13th, 2013, 9:49 AM PERMALINK


The NFL has long desired to expand its physical presence beyond the borders of the United States into Europe and other large markets. Over the past decade, these desires have slowly begun to take form with open discussions about the possibility of a team either relocating or expanding to a global metropolitan city in a new country. The most popular choice for the NFL and Roger Goodell appears to be London in the United Kingdom.

Since 2007, the NFL has hosted one game at Wembley Stadium in London; this year the Pittsburgh Steelers play the Minnesota Vikings on September 29. In doing so, the NFL is showcasing some of the league’s most popular stars in order to garner interest among international fans and test the market for the potential success a London-based or other international franchise might experience. While the NFL as a global and cross-cultural entity should seek to expand its influence and popularity, a permanent move to the U.K. would be financially detrimental to those that actually take the field during the season.

As former New England Patriot Tedy Bruschi stated this week on Football Today, “the taxes are higher in the United Kingdom. So you want to talk about money, that’s something players will look into.” Bruschi further expounded upon the high tax burden for players that could be face relocation saying, “what’s the difference going to be for players in terms of playing in the United States versus the United Kingdom? It’s going to be up there in 50 percent. Something players will frown upon.” The former three time Super Bowl champion even had his accountant examine what a move to London would do to his tax liability, and found it to be too oppressive.

Fortunately for Bruschi, he no longer faces the threat of paying the U.K.’s 45 percent top marginal tax rate, but other players may face that burdensome reality.

The Jacksonville Jaguars are continuously brought up as the team that could relocate as London’s permanent home team due to its small market and new ownership. The Jaguars’ franchise running back Maurice Jones-Drew – who stands to earn $4.95 million this season - would see his tax liability increase and after-tax earnings decrease if the team were to relocate to London.

Team Location

Total Tax Burden

Total Tax Liability

After-Tax Earnings

London, England

United Kingdom

44.4%

$2,208,449

$2,760,031

Jacksonville, Florida

United States

32%

$1,581,760

$3,368,240

* Disclaimer: Florida has no state income tax. Payroll taxes in each country are not factored into this analysis. Effects of the “jock tax” are not factored into this analysis.

If in this hypothetical relocation scenario for the 2013 NFL season the Jaguars remained in Jacksonville, Florida rather than move to London, England,  Maurice Jones-Drew’s tax liability would be $626,689 less and would earn $608,209 more after-taxes.  While the likelihood of the Jaguars relocating to London for the upcoming season is highly unlikely, the consequences of such a move remain the same regardless of year.

While playing an individual game in a different country each season doesn’t appear to pose a tax threat to players around the league, permanent foreign expansion would levy high income tax rates on players who might not necessarily have a say in what team they play for via the draft and trades. A move outside the U.S. could also see an expansion of the “jock tax” levied by foreign nations. Rather than seeking permanent international expansion, the NFL should aim to introduce a team to new markets in the United States where state income tax rates are more favorable to those who make the game memorable.

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