Thursday, July 8, 2010

Where LeBron Won't Get Crushed

The New York Post (my favorite paper) pointed out that LeBron might pass on the Knicks for no other reason than New York tax rates are much higher than the other cities/states he's considering. They estimate he will pay over $12 million in New York City and state taxes over the life of his contract.

Let's look at how the various suitor cities stack up in the analysis I did a few months ago. (Where Should I Live Where I Won't Get Crushed?)

                           State Tax       City Tax       Total      Debt Rank

New York               8.9                3.7            12.6             46

New Jersey            10.8                 0             10.8             50 

Cleveland                5.9                2.0             7.9              44

Chicago                  3.0                   0              3.0              42

Miami                       0                    0                0              12

(Note: see the linked piece above to read about Total Real Debt per Capita.)

Hmm. Looks like no contest. Since they will all pay him roughly the same amount (due to salary caps), these tax differentials will be highly meaningful.

Let's see what the market at Intrade is saying about where LeBron is heading...


New York                    7%
New Jersey                  7
Cleveland                    24
Chicago                        3
Miami                        63

Looks like the market agrees.

1 comment:

  1. It is not just the taxes that he would personally pay...think of the economic activity that New York is potentially missing out on by not getting him.