Tuesday, June 25, 2013
Seven-time NBA all star Dwight Howard is a free agent and, under the NBA's "Larry Bird Rule," can re-sign with the L.A. Lakers for a maximum of $118.0 million over five years (7.5% annual increases over his existing contract) or with any other team for a maximum of $87.6 million over four years (4.5% annual increases). The Houston Rockets has emerged as a likely bidder for Howard's services, and several tax folks have run the numbers and concluded that Howard would receive more after-tax income by signing with the Rockets rather than the Lakers, based on California's 13.3% top marginal income tax rate and the absence of a state income tax in Texas, after taking into account the application of various state and local "jock taxes."
- Accounting Web: Will Taxes Affect Dwight Howard's 'Decision?'
- Dream Shake: Will State Income Tax Bring Dwight Howard to Houston?
- Forbes: Could State Taxes Cause Dwight Howard to Flee L.A. for Houston?
- Joy of Tax Law: The Taxing Lives of Dwight Howard and Professional Athletes