The Cavaliers will have to give their best effort to complete a historic upset in Game 7, but Lebron will have to pay a little extra thanks to California’s steep “Jock Tax.” The jock tax targets traveling professionals, most notably athletes. Of the 21 states and 8 municipalities that have the tax, California, home to the Golden State Warriors, has the highest version in the country at 13.3%.
Since the jock tax is calculated by a “duty day” system, the athlete’s income is taxed based on how many working days he spends in the state. NBA players have about 229 days in season, and Lebron will spend at least three of those days in California because of Game 7. Since Lebron brings in $23.2 million in salary, that breaks down to $101,310.04 per duty day X 3 days in California = $303,930.13. Since the tax is 13.3%: 303,930.13 X .133 = $40,422.70.
That means Lebron will owe up to a whopping $40,422.70 just from the jock tax to the state of California just to play in Game 7.
Whether he wins or loses, Lebron will see a large portion of his bonus disappear. A win will net each player a $118,063.13 bonus, meaning Lebron is losing 1/3 just to the jock tax. If the Cavs lose, each player on the roster will bring home a $78,231.60 bonus, where James will actually be giving away half of his bonus just to pay in Game 7.
Throughout the NBA Finals series against Golden State, Lebron alone is set to pay California up to $161,690.80 in jock taxes.
It is difficult to think of 6’8, 250 lbs James as vulnerable. Sure, $161,000 might not be much to James, but he has no voice in California taxes. As a resident of Ohio, James cannot vote on tax laws in California, nor can he vote for politicians who to represent him. Instead, a tax is being forced on him with no opportunity to object.
The taxes don’t end with the jock tax either. James still has to pay the IRS at the marginal rate of 39.6 percent, plus FICA and state income taxes.
James will be the center of attention during Game 7, but the jock tax does not single out superstars. Instead, anyone who travels with the Cavaliers organization for Sunday’s game will have to pay the California jock tax. That means that trainers and equipment managers who are not bringing in the high paying NBA contracts will still have to shell out their earnings to California.
Photo Credit: Keith Allison