When it was obvious that Tom Brady was leaving the New England Patriots, I predicted he’d become a Los Angeles Charger. That team needed a quarterback and had just moved to L.A. where it would play in the world’s greatest new football stadium.
Brady is a native Californian, and L.A. is a great place for supermodel wives.
But Tom went to Tampa instead.
Not being all that close to Brady, I’m not privy to all the factors that took him to the Sunshine State instead of the Golden State. But I’ll guess that TAXES influenced his decision. You see, Florida—like New Hampshire—has no state income tax. California has a state income tax of around 13%.
Contracts can be complicated. Brady reportedly earned a base salary of “only” $1,120,000 in 2022. But that doesn’t count a “signing bonus” of $28,880,000 and other perks. So let us just round down his total annual compensation package to $30 million. So 13% of that is about $4 million. That’s what would have gone to California in state taxes. In Florida, Tom could keep that $4 million.
Hello Tampa Bay Buccaneers!
So sports agents now factor in state taxes when negotiating for their clients. The Lakers have to pay LeBron James over $44 million a year because if he played in Florida, he’d take home more pay from a $38 million contract than he would from a $44 million contract in California.
This brings us to Massachusetts, which has long had a state income tax, along with numerous other levies that we don’t have in New Hampshire. In November, Bay State voters approved a “millionaire surtax,” bumping up the state income tax from 5% to 9% for the “affluent.”
Red Sox outfielder Kiké Hernández recently signed a one-year $10 million contract. The Boston Globe reported that he was surprised and displeased when he learned of all the money he’d now be sending to Beacon Hill.
“Well [expletive] me!” said Hernández over the phone. “This is news to me. My financial guy hadn’t told me. As soon as I hang up with you, I’m reaching out to him.”
Sports agents will now have to ask for extra Red Sox money for their clients—like they already do now in California to keep contracts competitive with those issued in Florida or Texas. So Red Sox ticket prices will go up. Fans will pay the millionaire tax, not the players!
Other states, mostly blue Democrat states, have also passed “millionaire” taxes. But New York ended up losing revenue when countless millionaires then moved to Florida.
Blue states like Massachusetts, California, New York et al. are stuck. Illinois is especially screwed. Dems love to grow government. But public sector pension liabilities are overwhelming these states. Unlike the federal government, states can’t print money.
Consider that retired UMass President Billy Bulger has an annual pension of over $270,000. He and other fat cat public retirees in the Bay State must be paid. And Granite State sports fans help to pay them indirectly whenever we buy inflated tickets.
It’s a cautionary tale. Like the above states, N.H. will be screwed if we elect the big government types who thump tubs for broad-based taxes so they can hire more public sector types who vote Dem. It worked politically in California, Illinois, etc. But those spending chickens will come home to roost.
Tom Brady made a good move in choosing Tampa—where he immediately won a Super Bowl.
Granite Staters can make good choices with their votes—so we don’t end up with blue state blues and then echoing those sentiments so eloquently stated by Kiké Hernández.
“Well [expletive] me!”
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A retired Sports Management professor, Rep. Mike Moffett of Loudon chairs the House Committee on State-Federal Relations.
