When LeBron James decided to take his talents to South Beach, livelier night life wasn't the biggest advantage over electing to stay in Cleveland.
The tangible difference was in coming to a place with no state or city income tax.
The same benefit entices Albert Pujols as he weighs staying in St. Louis or opting for the Crayola colors of the Miami Marlins. The tax savings are gaudier than that grandiose home run feature he would be igniting with regularity at the new ballpark in Little Havana.
Just before LeBron announced The Decision, the Tax Foundation published a report showing that the tax savings in coming to Miami far outweighed the fact that the Cavaliers could offer $4.1 million more than the Heat due to the Larry Bird Exemption in the salary cap.
Ohio has a top income tax rate of 5.925 percent, and Cleveland adds another 2 percent. Florida and Miami have no income tax, so the saving is about $8 million on a $100 million contract.
Similarly, Missouri has a 6 percent income tax and St. Louis collects 1 percent. On a $20 million annual salary, Pujols would pay about $1.4 million in state and city taxes.
Then there is the so-called jock tax that many states impose on visiting athletes. The cut is computed based on “duty days” spent on trips to away games. The Tax Foundation figured that LeBron would pay about $211,000 more a year in jock taxes if he stayed with the Cavaliers because he would be playing more games in places that would reach into his wallet.
With the Marlins, Pujols wouldn’t be taxed at home or on Interleague trips to Tampa Bay. Washington and Texas are among the few places where pro teams play that don’t impose the controversial jock tax. So no tax to away games against the Nationals, Astros and Rangers. There was a bill to adopt a jock tax in D.C., but it hasn’t gained traction.
Illinois has a retaliatory jock tax that applies to players from places that tax visiting athletes. Since Florida doesn’t have a jock tax, Marlins players aren’t assessed the 3 percent fee when they play in Chicago. As a Cardinal, Pujols gets charged on every trip to Wrigley, and as a division rival of the Cubs it happens frequently.
Wherever he goes, Pujols will make a mountain of money. But he could take less and end up with more with the Marlins. More than enough to split the difference on stone crabs at Joe’s.
For more about the jock tax, a comprehensive report from 2004 on taxfoundation.org shows how it impacted all the players on the 2003 major league All-Star teams. Alex Rodriguez, who was making $22.5 million, was taxed almost $268,000 per duty day that season. It cost him $17,951 to play in the All-Star game in Chicago.
The Marlins' representatives, Brad Penny and Armando Benitez, weren't subject to Illinois' retaliatory tax. Nor was Toronto's Carlos Delgado, who was earning $19.7 million that season. Shows why differing tax laws would influence a free agent's decision.
For what it's worth, here is what Pujols would look like in the Marlins' new garb.