USA Today Leiweke Interview: Off season Pump and Hype

[rocwell]

NY has a similarly shitty tax structure to California. Chicago has horrendous taxes too. All of the big markets are as bad or worse than Canada. Only Florida and Texas teams have Canada beat tax wise, and they have every team in the NBA beat tax wise.

NY - 8.8% = ~3.5 games salary to pay state tax

Chicago: 5% = ~2 games salary to pay state tax.

In short, Ontario's and California's athletes are paying most tax.

P.s. We shouldn't even compare Leiweke's taxations to athletes.

Germany 1-0

[mcHAPPY]

NY - 8.8% = ~3.5 games salary to pay state tax

Chicago: 5% = ~2 games salary to pay state tax.

In short, Ontario's and California's athletes are paying most tax.

P.s. We shouldn't even compare Leiweke's taxations to athletes.

Germany 1-0

It is the federal tax that should be compared.

[rocwell]

It is the federal tax that should be compared.

I believe American athletes who play in Canada must fill US income tax return + they also face special withholding rules. It's like they're paying Ontario taxes on top of U.S taxes.

Not 100% sure, but that's how it should be.

[Primer]

NY - 8.8% = ~3.5 games salary to pay state tax

Chicago: 5% = ~2 games salary to pay state tax.

In short, Ontario's and California's athletes are paying most tax.

P.s. We shouldn't even compare Leiweke's taxations to athletes.

Germany 1-0

There are city taxes to go along with state taxes too. You'll have to spend more than 30 seconds to get a true picture of the taxes. Even property taxes are a huge factor for athletes, since they tend to live in multi-million dollar residences, which have humongous tax bills, depending on where you live.

[Primer]

I believe American athletes who play in Canada must fill US income tax return + they also face special withholding rules. It's like they're paying Ontario taxes on top of U.S taxes.

Not 100% sure, but that's how it should be.

Not true. I have lots of American friends who work in Canada and they don't double pay taxes to each country.

[rocwell]

There are city taxes to go along with state taxes too. You'll have to spend more than 30 seconds to get a true picture of the taxes. Even property taxes are a huge factor for athletes, since they tend to live in multi-million dollar residences, which have humongous tax bills, depending on where you live.

I know sir. I'm talking only about income taxes.

[rocwell]

Not true. I have lots of American friends who work in Canada and they don't double pay taxes to each country.

Americans must pay U.S. federal taxes on u.s source income, so all Sprite, McDonalds, Nike endorsements, game performances in USA are taxed under U.S rules, not Canada's 29%.

2-0

[DanH]

They do not pay double taxes. That's what the income tax treaty made sure of.

Ontario's provincial tax is indeed very close to California's and many other states'.

The federal numbers being listed here are misleading though. Yes, 39.5% is the highest bracket. But in the US, after the first 100k, the federal government stops levying payroll taxes - which are paid at the company level for the individual, and amount to about 15% (of the original amount). So if a player is getting a base salary of 8.5M, the company is paying them 10M, with 15% being reduced by payroll tax (this is how Canadian payroll tax works, though the percentages are slightly different). Except that in the US, that payroll tax practically doesn't exist, as it is only levied on the first 100k a player makes.

As such, that player's original salary in the US is 10M, and is taxed at 39.5% - meaning a take home income (before state taxes) of 6.06M. That amounts to 71% of the player's originally assumed 8.5M income (the equivalent in Canada). Meaning an effective US federal tax rate of 29% - the same as Canada's federal tax rate. That is why the no-tax states have much better taxes than Canada (Ontario in particular), and why we line up fairly well with California, NY, etc, which have similar state tax rates to Ontario's 13.5% (Cali being the worst at 12.9%).

It should be noted that players are also taxed where they play, not where they are paid, so half of all games will be taxed at roughly a league average rate. As such, tax-free state teams will see an overall tax rate at about the 25th percentile, and top end tax states at about the 75th percentile. Meaning the difference between them is about half of the actual difference in taxes where the team resides.

So, with Texas, for example, having no state tax, the tax on a 10M contract would be 2.9M, leaving them with a take home of 7.1M or so. Except if we assume the average NBA team has taxes midway between the highest (Ontario, 13.5) and lowest (0), then half of their earnings are taxed at that rate on the road - meaning a total tax of 3.24M, and a take home of 6.76M.

In Ontario, the tax on a 10M contract would be (at 29% + 13.5%) 4.25M, meaning a take home of 5.75M. Except, again, half would be on the road. So again, they would average the same road ta (roughly). Meaning a total tax rate of 3.91M on their 10M contract, and a take home of 6.09M.

So there you have it. A give back of about 670k per 10M is the biggest difference in taxes you will see in the NBA.

[Raptor Jesus]

Bobby, we get it you know more than us.

Now stop messing about on RR and go get GV on the phone.

[stretch]

My sister in Illinois owns a house worth approximately double what my house is worth in Ontario based on respective municipal assessments, but her property taxes are almost four times what mine are.

[rocwell]

My sister in Illinois owns a house worth approximately double what my house is worth in Ontario based on respective municipal assessments, but her property taxes are almost four times what mine are.

Yup. Illinois (and NJ ) is known for high property taxes. I've heard that property taxes in Illinois average well over 2%. Insane.

[Dr Hannibal Lecter]

Finally a MLS executive that I really like and don't take s@!t from now one

[OptimalOptimist]

Leiweke is a boss.

[BallaBalla]

If Lowry hadn't signed so Quickly the way that he did, this would All be talk

But he's done a great job so far and there's no question that we're already being taken more seriously

[imanshumpert]

They do not pay double taxes. That's what the income tax treaty made sure of.

Ontario's provincial tax is indeed very close to California's and many other states'.

The federal numbers being listed here are misleading though. Yes, 39.5% is the highest bracket. But in the US, after the first 100k, the federal government stops levying payroll taxes - which are paid at the company level for the individual, and amount to about 15% (of the original amount). So if a player is getting a base salary of 8.5M, the company is paying them 10M, with 15% being reduced by payroll tax (this is how Canadian payroll tax works, though the percentages are slightly different). Except that in the US, that payroll tax practically doesn't exist, as it is only levied on the first 100k a player makes.

As such, that player's original salary in the US is 10M, and is taxed at 39.5% - meaning a take home income (before state taxes) of 6.06M. That amounts to 71% of the player's originally assumed 8.5M income (the equivalent in Canada). Meaning an effective US federal tax rate of 29% - the same as Canada's federal tax rate. That is why the no-tax states have much better taxes than Canada (Ontario in particular), and why we line up fairly well with California, NY, etc, which have similar state tax rates to Ontario's 13.5% (Cali being the worst at 12.9%).

It should be noted that players are also taxed where they play, not where they are paid, so half of all games will be taxed at roughly a league average rate. As such, tax-free state teams will see an overall tax rate at about the 25th percentile, and top end tax states at about the 75th percentile. Meaning the difference between them is about half of the actual difference in taxes where the team resides.

So, with Texas, for example, having no state tax, the tax on a 10M contract would be 2.9M, leaving them with a take home of 7.1M or so. Except if we assume the average NBA team has taxes midway between the highest (Ontario, 13.5) and lowest (0), then half of their earnings are taxed at that rate on the road - meaning a total tax of 3.24M, and a take home of 6.76M.

In Ontario, the tax on a 10M contract would be (at 29% + 13.5%) 4.25M, meaning a take home of 5.75M. Except, again, half would be on the road. So again, they would average the same road ta (roughly). Meaning a total tax rate of 3.91M on their 10M contract, and a take home of 6.09M.

So there you have it. A give back of about 670k per 10M is the biggest difference in taxes you will see in the NBA.

Yo for real are you an accountant man?