Sacramento we do have a problem and it affects people from San Francisco to San Diego. Our income tax rate of 13.3% is not an incentive for athletes to play for our teams. No matter if it’s the Lakers, the 49’ers and the Dodgers we are handicapped by the high taxes our state have. Lebron James would rather play for the Miami Heat than to consider the Lakers, Zack Greinke recently moved to the Diamondbacks.
San Diego tax activist Richard Rider brought forth this issue a year ago and I realized that this was going to happen to fans in California sooner or later where the issue would hit home for Dodger fans.
By providing an incentive for top athletic talent to play for California teams it helps the value of the franchises and the communities that host them. I would consider the Top 25% in performers in their leagues eligible for the tax incentive where the 13.3% tax rate gets cut in half for the duration of their contract. 6.65% would be the tax rate for these eligible athletes.
How would we consider the Top 25% in performance? Leaders in wins, strikeouts, home runs, hits, earned run average would be good metrics if we were considering a baseball player. You would have to be a leader in 2 of the categories in order to be eligible for the tax incentive. The NBA, NHL and NFL would also set their categories in consultation with the Board of Equalization.
As a compromise and to encourage investment in our state, I would require a minimum home purchase of 1/10th the average yearly value of the contract be in California and it must be their primary residence in order to get the tax incentive. If your primary home is near Dallas Texas then no tax cut.
If we give incentives for Hollywood productions to stay in our state, we can do the same for our pro-athletes. Progressives may say let them eat cake or teams should just pay more to compensate for the high taxes in our state, but we need to have the incentives to encourage the best to play for our teams,
If we have modest tax rates we could remove the fiscal considerations for athletes who decide which city to play in when they are in free agency and they could just worry about the weather, the stadium and other non-financial factors in choosing the team of their choice.