It seems where ever Cliff Lee lands he will get a five year 120 million dollar deal. How much of that he will get to keep really depends on where he ends up signing. Lee reportedly would like to stay with the Texas Rangers, and Texas does not have a state income tax, meaning more of his income would be his and his alone. Of course Texas does have a jock tax, and that could be a problem. However, given the treatment of his wife at the hands of Yankees fans maybe the tax incentive isn’t the overall deciding factor.
I am not a tax attorney, nor do I do my own taxes. That is what accountants are for, but since I live in the North I know the tax burden is far greater up here than anywhere else in the country. Let us say Lee signed with the Yankees and decide to live in NYC. He would then be subject to the 8.97% state tax as well as the 3.95% city tax. Anyway we slice that that is a heck of a lot of money to give up.
No if he were to stay with the Rangers he would be subject to the jock tax, a should be unconstitutional tax to help fill city coffers from out of state professional athletes. In Texas the jock tax would steal 2.25 million dollars out of the 120 million contract. As with anything tax related it is all very complicated, and I am not the guy that explain outright.
I think in the end this decision for Lee comes down to three things. First the ability to win, second the comfort level, and third as with all of us who are married what his wife thinks. The Rangers should be a pretty good team for years to come and they should be the front runners, but we can never underestimate the power of the Yankees check book.
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