Saturday, February 6, 2016

When do sports stars have an income tax rate over 100%?

Here are a couple stories highlighting the tax issues faced by athletes:

1. Paying to play in Memphis

That’s where Johnson comes in. “In certain instances,” Klempner says, “it can actually cost a player money to play in Memphis. It’s completely disproportionate.” Johnson didn’t quite pay to play in Memphis, but there will be cases like his going forward as the Grizz front office uses 10-day contracts to experiment with potential roster fits.

2. California taxes will eat up all of Cam Newton's Super Bowl earnings 

Remember when Peyton Manning paid New Jersey nearly $47,000 in taxes two years ago on his Super Bowl earnings of $46,000? Manning has nothing on the state taxes facing Carolina Panthers quarterback Cam Newton for Super Bowl 50 in Santa Clara, Calif.
(Note - I know a business operator who says that NC tax laws mean this isn't quite true - as Newton will get a credit on his NC taxes.  At the very least, however, these articles highlight some strange and sub-optimal tax laws.)

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