Fresh off his Super Bowl win, Baltimore Ravens quarterback Joe Flacco signed a contract extension worth $120.6 million, making him the highest paid player in the National Football League.
But as Americans for Tax Reform points out, that’s just on paper. After state and local taxes are factored in, Flacco actually makes less take home pay than the New Orleans Saints’ Drew Brees.
Reason TV ran a similar commentary when NBA star LeBron James left his hometown Cleveland Cavaliers to play for the Miami Heat. Because Florida doesn’t have an income tax, some tax experts predicted that James could have a higher net income playing for the Heat even if the value of his contract was less than what he could make as a Cavalier.
While there’s no indication that professional athletes are making contract decisions based solely on a team’s state and local tax rates, it would certainly make sense in the long run.
After all, according to ATR’s analysis, after taxes Brees is projected to make $470,000 more every year than Flacco. At $470,000 a year, that’s $2.82 million in extra taxes over the course of Flacco’s new contract.
With that kind of contribution to the city and state, Ravens fans should count any Super Bowl repeat as icing on the cake.
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