Should the state income tax advantage/disadvantage be changed in the new CBA?

I have no solution to this problem, but it's obvious that state income tax can be a huge advantage for teams located in states without any income tax or low income tax vs those teams who play in states with high income tax... usually amounting into a few million more over the life of that contract, including endorsement money. Is this not a loophole in the system that circumvents the salary cap and gives "extra" cap space?

Florida and Texas teams (Miami, Orlando, Dallas, Houston and San Antonio) have the luxury of selling players the fact that they would be playing tax free, potentially earning millions more, while teams like Portland (11%), New Jersey (10.75%), New York (8.97%) and all the California teams (9.55%) are all at a monetary disadvantage. This can also be viewed as tax-free teams being able to offer 11% more, 10.75% more, 8.97% more etc...

There are 2 distinct advantages to tax-free teams:

1) The same valued contract, $10 million per year for example, would earn them more playing there vs high-tax teams. ($10 million in Orlando vs $9,113,000 in NY).

2) The player can be offered a slightly lower salary, make roughly the same amount he would make playing for a high-tax team, and leave the extra cap space to sign other players. Case in point: Miami Heat

In scenario 2, tax-free teams in theory could be granted up to $5.5 million more in cap space (depending on which team it is compared to). The players make the same money as they would in high-tax states, but the team now has that extra room to pursue more talent...

A lot of people will take this as me calling out Miami, but I'm not. Really they're just a prime example because of recent free agency. Orlando, Houston, Dallas, San Antonio all have that same advantage.

Do you guys feel this needs to be addressed in the new CBA or are you fine with the way things are? Obviously the tax-free vs high-tax teams will vote their own biased way.

State income tax rates: www.taxadmin.org/fta/rate/ind_inc.pdf

how could they??? tax laws are made by governments,not teams

ok your upset that your team missed on the main names and them going to mia,but that had do do with a desire to play together...really nothing would have changed that

Unless the player has his accoutant in the negotiations, I doubt #2 happens that much. #1 could be considered an advantage, but also remember that states without state taxes DO get their money from somewhere. It's usually in the form of increased property taxes, sales taxes, etc.

For the average person, it generally evens out. For high paid athletes (and low income people) there are advantages and disadvantages to living in certain states. It's not just as simple as state taxes.

the salary cap can be lower for teams in Florida and Texas.

Quote:

Originally Posted by abe_froman

how could they??? tax laws are made by governments,not teams

You're right. They couldn't change the state laws obviously and like I said, I have no answer. Maybe a rule that states a player can make no more than a certain amount on his NBA contract and sort of minimize the advantage. Don't really know.

Quote:

Originally Posted by Southsideheat

the salary cap can be lower for teams in Florida and Texas.

thats an unfair penalty though ,and nothing to do with nba salary..besides what happens if fl votes to raise taxes,then they are stuck with lower cap and the tax hit that the rest of the teams dont have to deal with

Quote:

Originally Posted by IndyRealist

Unless the player has his accoutant in the negotiations, I doubt #2 happens that much. #1 could be considered an advantage, but also remember that states without state taxes DO get their money from somewhere. It's usually in the form of increased property taxes, sales taxes, etc.

For the average person, it generally evens out. For high paid athletes (and low income people) there are advantages and disadvantages to living in certain states. It's not just as simple as state taxes.

Depending on the place, but the savings over the life-time of the contract vs possibly lower property tax (on a house that is probably worth 10% of the contract) are not equal at all. Most players are aware of the property taxes and choose to live in areas where they are lower. The same can be said for state income tax.

Quote:

Originally Posted by Giaps

You're right. They couldn't change the state laws obviously and like I said, I have no answer. Maybe a rule that states a player can make no more than a certain amount on his NBA contract and sort of minimize the advantage. Don't really know.

like i said,ok your upset the guys you wanted went to mia,but that wasnt due to taxes,that was more because they had a desire to team up.you can,but your still subject to the laws of gov's.kobe having to pay more of his salary to taxes than wade does is not the nba's problem.