Forget LeBron James going to the Nicks. Reason? Taxes, both Federal and State, will eat up 67% of any multimillion dollar deal. See here
But while the amount LeBron is paid would be the same in each of his potential destinations, the amount he will receive will vary greatly. Why? Because while Florida doesn't have an income tax, New York's personal income tax is 8.97 percent and the rate in New York City is 12.62 percent (include the state income tax). And now, New York politicians want to raise the rate even further.
New York Assembly Speaker Sheldon Silver is reportedly pitching a plan for an increased "millionaire's tax" aimed at 75-85 thousand New Yorkers making $1 million or more a year… The plan would jack up a current millionaires tax another 11-percent. The current "millionaire's tax" actually starts affecting people who have incomes over $200,000. High income tax earners would pay more than 13-percent of their salary in local taxes.Let's do the math. At 13 percent, LeBron James would pay over $35 million in state income taxes alone over the next six years (with current endorsement amounts). Add to that a 35 percent federal tax rate and 6.2 percent tax for social security, and if LeBron goes to New York, after taxes he'll end up with less than half of what he earns. Now, influencing Lebron's decision will undoubtedly be many factors — basketball, winning, loyalty, branding — but one factor that no one's talking about is the tax burden that would come with his potential destinations. And since LeBron wants to build himself into a billion-dollar brand, losing 13 percent of his income that he wouldn't be losing in Florida is something he and his financial advisors will likely consider.
LeBron isn't the only businessman who's influenced by taxes. Millionaires have been leaving New York and other high-tax states for years.