dean456 wrote:dshearn wrote:dean456 wrote:
Something I think people underestimate about Crowder in Miami. He's been a journeymen and been traded 6 times in 7 years. He's also by far had his most productive year or half year with Miami shooting 48% and 44% from 3 after having a career shooting around 38-42% and 32-33% from 3 everywhere else. I think Crowder sees the value of being here and knows that he's appreciated here which is something he'd value.
Income taxes also matter in these negotiations. I've only done quick online research for this so take this with a grain of salt but in Toronto they are taxed 50-53% of their income when earning above 1mil per year. In other states in America its much lower at like 5-13% but in Florida, Texas and Washington its 0%. So teams like Houston, San Antonio, Dallas, Washington, Miami and Orlando have an advantage when it comes to offering lower contracts.
This is a another big part of why I question Giannis having interest in Toronto as a free agent destination. Giannis would be taxed 53.4% of his income in Toronto I believe so a 37.5mil max would cost him $20,039,344 in tax compared to $0 in Miami.
i researched this the other day. I am not a tax guy, and the guy who wrote a pretty in-depth article about it was basically talking about how Kawi took home major bucks with the clippers even tho his salary was lower.
The Federal income tax, off sets the CAN tax to a degree. Plus their is "jock tax" You pay state tax from the state you play in. That use to be off set by Federal (again to a degree), but is no longer off set. So the effective difference between California and Florida is between 8% and 13%. I cant exactly remember the tax on bonuses, but I think Cali is 15%. The effective difference between the Raptors and the Heat is 15% to 18%. The reason the value changes is the States you play games in. One game in Cali? You pay tax on that income in California.
Okay so would that mean that Toronto players are taxed 53% of their home games which would be 41/82 games which would make it 10mil less than what Miami could offer for someone like Giannis?
That is my understanding, i think the 15% bonus money is taxed at that 53.38 rate. There was something else like costs, American based cost could not come out of the CAN taxes. So there is very few tax out of nation tax write offs on that 53%. Kawhi ended up making 12 million more over 3 years even though his Clipper offer was 35m verus the Raptor's 36.6m per year offer.
As i understand it (again I am not a tax guy) California currently runs 9.30 income tax with some regions like San Francisco that adds another 1.3, and there is legislation working its way though the state assembly to bring that up 3% on people that make over 1 million per year. That could matter in Giannis was looking at the Raptors, Golden State and Miami, or if Kawhi was thinking about Miami. Golden State could very well end up with a whopping 13.6% STATE income tax. Add that to the 36% federal and you are at 49.5%.
Assuming the Jock tax again with 50% of the games in Florida, that's 2.5+million a year advantage over California if that new tax goes in place, and 3.3+million per year over the Raptors for NBA salary.