Rafael122 wrote:nate33 wrote:Kanyewest wrote:
That seems like a huge chunk of money for Gortat to sign for. Plus there are no sale taxes in Florida.
The state tax issue is also overblown.
Let's assume that we offer $11M. The state income tax in DC is 8.5%. It is only owed for 41 games, or half the season. If Gortat played in Miami, he would not owe income tax on those 41 games, but he would owe income tax on two extra road games in Washington. So effectively, the income tax disparity covers 39 games of an 82 game season. Gortat would pay an extra 4.04% in income taxes if stayed in DC. That's $430,000 out of $11M. Also you have to factor that Florida is going to have higher sales taxes, property taxes and fees to partially offset their revenue lost by not having income taxes. In reality, that 8.5% differential in income taxes is probably more like 5% net. So that $430,000 is really more like $260,000. It's not that big of a deal. If Miami offers $10M, we can offer $10.3M and offset the tax disparity.
He also wouldn't owe taxes on the 4 games against Orlando and the 6 games played in Texas.
And there are easy ways to decrease the state tax even further.