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Top 50 Highest Paid Athletes for 2013 - After Taxes


Posted by Matt Blumenfeld on Tuesday, May 28th, 2013, 12:04 PM PERMALINK


Recently, Sports Illustrated published their “Fortunate 50” in which they examined the highest paid athletes in the U.S. based on salary, winnings, bonuses and endorsements. In order to account for salary, winnings and endorsement deals, Sports Illustrated consulted “players’ associations, tour records, online databases, agents and media reports. The endorsement estimates come from a stable of marketing executives, agents and other experts, including Burns Entertainment & Sports Marketing.”

While Sports Illustrated lets the general public know who the top 50 highest paid athletes are for 2013, they did not account for the income tax liabilities or after-tax earnings of these athletes. As ATR has pointed out over the past several months, $20 million dollars earned in one state may not be the same as $20 million earned in another and can result in lists, such as the “Fortunate 50”, telling only half the story.

When tax burdens and liabilities are factored into the “Fortunate 50”, athletes move up and down in the rankings. The difference in state and local income tax rates proved to be a determining factor for an athlete’s place on the list. For example:

  • NFL’s Matt Schaub – Houston Texans - moves up from 27(Sports Illustrated) to 16 (ATR)
  • MLB’s Miguel Cabrera –Detroit Tigers -  moves up from 36 (Sports Illustrated) to 28 (ATR)
  • MLB’s Zack Greinke –Los Angeles Dodgers -  moves down from 10 (Sports Illustrated) to 15 (ATR)
  • NBA’s Amar’e Stoudemire –New York Knicks - moves down from 24 (Sports Illustrated) to 29 (ATR)
  • NASCAR’s Dale Earnhardt Jr. moves up from 49 (Sports Illustrated) to 44 (ATR)

Tax competition between the states is why many Americans have fled states with high income tax burdens – California, New York, Illinois, and Maryland – for more economically favorable states with lower tax burdens, such as Texas and Florida.

With tax competition between states in mind, the “Fortunate 50” list of highest paid athletes in the U.S. for 2013 needed to be updated to account for after-tax earnings.

 

The chart below highlights the estimated state and local tax burden and liability, as well as the federal income tax liability of each of the highest paid athletes in the U.S. for 2013.

The Top 50 Highest Paid Athletes for 2013 After-Taxes are as follows:

After-Tax

Ranking and Earnings

Athlete

Federal Income Tax Liability

State and Local Income Tax Liability

State and Local Income Tax Rate

Sports Illustrated’s

Ranking

#1

$60,300,000

Floyd Mayweather Jr.

$29,700,000

$0

0%

#1

#2

$37,885,150

LeBron James

$18,659,850

$0

0%

#2

#3

$29,158,000

Drew Brees

$15,774,000

$2,868,000

6%

#3

#4

$27,362,148

Tiger Woods

$13,476,879

$0

0%

#5

#5

$25,158,000

Kobe Bryant

 

$15,460,500

$6,231,050

13.3%

#4

#6

$21,226,536

Phil Mickelson

 

$13,044,240

$5,257,224

13.3%

#6

#7

$20,709,860

Derrick Rose

 

$11,022,990

$1,670,150

5%

#7

#8

$19,334,631

Peyton Manning

 

$10,230,000

$1,435,369

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

#8

#9

$19,216,940

Dwayne Wade

$9,465,060

$0

0%

#11

#10

$17,152,000

Felix Hernandez

 

$8,448,000

$0

0%

#14

#11

$17,086,225

Kevin Durant

 

$9,131,100

$1,452,675

5.25%

#12

#12

$16,991,200

Vincent Jackson

 

$8,368,800

$0

0%

#15

#13

$16,270,950

Carl Nicks

$8,014,050

$0

0%

#21

#14

$16,205,068

Alex Rodriguez

 

$9,867,000

$3,727,932

12.468%

#9

#15

$15,583,740

Zach Greinke

 

$9,576,600

$3,859,660

13.3%

#10

#16

$15,262,600

Matt Schaub

$7,517,400

$0

0%

#27

#17

$15,155,360

Cliff Lee

$8,342,400

$1,782,240

7.05%

#17

#18

$14,787,500

Joe Mauer

 

$8,250,000

$1,962,500

7.85%

#20

#19

$14,632,270

Mario Williams

 

$8,299,500

$2,218,230

8.82%

#18

#20

$14,452,500

Prince Fielder

 

$7,755,000

$1,292,500

5.5%

#23

#21

$14,341,916

Johan Santana

 

$8,679,000

$3,279,084

12.468%

#13

#22

$14,275,690

Dirk Nowitzki

 

$7,031,310

$0

0%

#35

#23

$13,908,400

Ryan Howard

 

$7,656,000

$1,635,600

7.05%

#25

#24

$13,899,000

Calvin Johnson

$7,458,000

$1,243,000

5.5%

#29

#25

$13,796,596

Carmelo Anthony

 

$8,349,000

$3,154,404

12.468%

#16

#26

$13,687,532

Derek Jeter

 

$8,283,000

$3,129,468

12.468%

#19

#27

$13,087,680

CC Sabathia

 

$7,920,000

$2,992,320

12.468%

#22

#28

$13,038,000

Miguel Cabrera

 

$6,996,000

$1,166,000

5.5%

#36

#29

$12,787,754

Amar’e Stoudemire

 

$7,738,500

$2,923,746

12.468%

#24

#30

$12,669,000

Justin Verlander

 

$6,798,000

$1,133,000

5.5%

#38

#31

$12,425,150

Chris Bosh

 

$6,119,850

$0

0%

#47

#32

$12,392,397

Mark Teixeira

 

$7,499,250

$2,833,353

12.468%

#28

#33

$12,351,000

Tim Lincecum

 

$7,590,000

$3,059,000

13.3%

#26

#34

$12,115,895

Roy Halladay

 

$6,669,300

$1,424,805

7.05%

#39

#35

$12,028,800

Matt Kemp

 

$7,392,000

$2,979,200

13.3%

#30

#36

$11,930,050

Cole Hamels

 

$6,567,000

$1,402,950

7.05%

#44

#37

$11,779,632

Dwight Howard

 

$7,238,880

$2,917,488

13.3%

#31

#38

$11,778,912

Vernon Wells

 

$7,128,000

$2,693,088

12.468%

#32

#39

$11,588,460

Chris Paul

 

$7,121,400

$2,870,140

13.3%

#33

#40

$11,464,950

Adrian Gonzalez

 

$7,045,500

$2,839,550

13.3%

#34

#41

$11,352,687

Joey Votto

 

$6,352,500

$1,544,813

8.025%

#45

#42

$11,344,000

Pau Gasol

 

$6,963,000

$2,793,000

13.3%

#37

#43

$11,284,000

Alfonso Soriano

 

$6,006,000

$910,000

5%

#50

#44

$10,911,816

Dale Earnhardt Jr.

 

$6,077,467

$1,427,284

7.75%

#49

#45

$10,880,770

Joe Johnson

 

$6,584,490

2,487,740

12.468%

#43

#46

$10,793,700

Matt Cain

 

$6,633,000

$2,673,300

13.3%

#40

#47

$10,780,275

Carl Crawford

 

$6,624,750

$2,669,975

13.3%

#42

#48

$10,735,550

Eli Manning

 

$6,105,000

$1,659,450

8.97%

#48

#49

$10,687,200

Barry Zito

 

$6,626,400

$2,766,400

13.3%

#41

#50

$10,203,000

Albert Pujols

 

$6,270,000

$2,527,000

13.3%

#46

 

* The estimated after-tax earnings and overall tax liabilities used do not reflect the “jock tax” liabilities of each athlete.

Methodology Note: For Illustrative purposes, Americans for Tax Reform used a flat rate of 33 percent for the Federal Income Tax column. This is a good faith estimate of each athlete’s average effective tax rate after accounting for deductions and lower brackets. At the margin, each athlete’s top marginal federal income tax rate is 39.6 percent plus a 3.8 percent Medicare surtax. Team sport athletes are assumed to reside in the state and city in which their team is located. Individual sport athletes (e.g., boxers, NASCAR drivers, etc.) are assumed to reside in their actual residences. This distinction is made to account for the so-called “jock tax”.

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