Why Diwght won't end up in LA next year (or its down to Houston/Atlanta)

[thecampster]

Listening to 93.7 this morning Sheridan was a guest and he mentioned something extremely important.

Although the Lakers can offer the most money, the effective salary is lower than Atlanta which is lower than Houston. I'll explain.

California's top state tax rate next year will top 13.3% (7.1% higher than Georgia) and a starting state sales tax of 7.5% + local county taxes (3.5% higher than Georgia). Texas has no state income tax, but a beginning sales tax at 6.25% statewide with local taxes on top of that making sales taxes about 2 percent higher than Georgia.

Given a yearly salary of 18million and a federal tax bracket of 39 percent this leaves about 10.5 million after taxes on an 18 million dollar salary.

California (10.5 x .867)= an effective salary of 9.1 million before sales and other taxes.

Georgia (10.5 x .932) = an effective salary of 9.85 million the first season with slightly lower sales tax than Texas

Texas (10.5 x 1.0) an effective salary of 10.5 million the first season

As the contract grows and with the extra 3% raise annually in L.A., eventually the effective salaries become equal annually but over the 1st 4 years of the contract the effective salary for both Georgia and Texas is considerably lower than that of LA. Although LA can offer a large 5th year salary, the difference in effective salary is significantly less than an extension deal in one of the other two markets.

Additionally, any extra marketing dollars would receive the same kind of devaluation.

The argument about Money was just ruined by California legislature with their massive increase in millionaires taxes.

IE, Golden State is also out. The rumors involving Dallas are unfounded based on salary cap rules dealing with cap holds. Thereby the only real contenders are Houston and Atlanta.

[Guest]

This stuff always comes up and is overblown. States have jock taxes that require visiting players to pay state income taxes, so a little less than half of your games will definitely have income taxes. (http://www.cbafaq.com/salarycap.htm#Q76)

I really do not get why people talk about this. The tax system is not some simple 1+1=2 type of formula, it is really complex and people with equivalent jobs, salaries, demographics, location, etc. can end up paying different rates based upon how good their accountants are. Because of this, I would not put much stock into income taxes being a big factor.

[frosgrim]

Howard might come to the Hawks but I think several things have to fall into place:

1) Howard and Paul have to come to an agreement that they will both sign with the Hawks

2) Howard's shoe contract has to be modified to include ATL. If I remember correctly he gets considerably more money from the shoe contract if he's playing in NY or LA than anywhere else.

Without the shoe contract modification, I can't see Howard playing even if it makes basketball sense.

[Guest]

Adding more fuel to the fire - Chuck Person speaks on D12 and D'Antoni:

Q: How his role in D'Antoni's staff changed:

- Under Phil Jackson first, and then Mike Brown, my primary role was defense. But when Mike D'Antoni took over, he wanted to implement his offense, which was his perogative to make the team better going forward. So there wasn't anything I could do with it, and I just had to fit in with whatever role was given to me.

Q: How his release came about:

- I got a call from Mike (D'Antoni) telling me he would me more comfortable bringing in his own coaching staff, which I understood, but I was a little surprised.

Story last season when Andrew Bynum shot a 3-pt and got benched, Kobe Bryant, as the Team Captain, didn't hold Bynum accountable and actually catered to Bynum's action. So Chuck Person got into Kobe's face in the locker room for not being accountable.

Q: What did he say to Kobe about being more accountable regarding that Bynum 3-pt:

- What makes a good assistant is loyalty. What was said, whatever goes in house stays in house.

Q: Why Mike D'Antoni's system didn't worked:

- D'Antoni said on his own accord "3-Pointer takes priority over a Post-up". He said that himself to the team. But eventually the ball has to go inside some, so then of course he made the adjustments, although it was a little late for everyone's liking. But he did it, and we benefited from it going 28-12. Does his system fit everyone? That's to be determined. If a guy doesn't like to play in his system then they'll leave, if they like it, they'll stay.

Q: D'Antoni's relationship with Dwight:

- Dwight Howard's relationship with Mike D'Antoni is... serviceable. When you have 4 superstars like we have last year, not everyone would be happy. You have Kobe who is always strong headed, etc. You have 4 dynamic guys that have been elites and you have a coach that comes in who wants to play with a system that doesn't fit with all the guys. So everyone's to blame, everyone has to comeback and sacrifice to achieve more.

Q: Describe Dwight as a player, and as a person:

- I have a good relationship with Dwight. Whoever gets Dwight will have a special special player in their hands. The guy came back 3 months early because he wanted to show Lakers fans he wanted to play for the Lakers. Once he got into shape we were a Top 5 defensive team in the league. When he's out of the game we are just ranked #26 in defensive efficiency, that's a big discrepancy. Whoever gets this guy, that team will be a championship team every year.

Q: Where do you guess Dwight will sign:

- Dwight loves LA. He loves the city. He knows being here is the creme of the crop. But I know this, he doesn't want to be in a place always fighting just to get into the next round. He's going to go to a team that has the best talent around, and he's going to weigh his options on which team gives him the best chance of winning. This is Dwight's first time in free agency, this is the biggest time in his life. He has the right to be selfish and do what's best for himself, what's best for his family.

http://espn.go.com/espnradio/losangeles/play?id=9309562

[Jody23]

I think the whole state tax thing is being a little overblown. Simply put, Dwight isn't happy in LA and since he knows he's likely to get another big contract in three years, he's going to leave to a be in a situation where he's happy.

[MaceCase]

Nothing a decent tax lawyer and accountant can't get around. The moment I see all of the celebrities and Hollywood industry and other major corporations flee places with "millionaire taxes" like LA, NY and Cook county is when I'll actually believe these people are worried.

[JETSET]

Nothing a decent tax lawyer and accountant can't get around. The moment I see all of the celebrities and Hollywood industry and other major corporations flee places with "millionaire taxes" like LA, NY and Cook county is when I'll actually believe these people are worried.

There are a ton of people already fleeing California. Businesses and individuals included. California's state income tax and sales tax are insane and he would save around 3 million over a 4 year deal in state income taxes if he came to Atlanta. This isn't including state sales tax where he would probably save another million or two.

They say he stands to lose 30 million if he leaves LA. Take out the 20 million of the fifth year and the 4-5 million in state taxes and he will actually only lose 5-6 million over 4 years.

[coachx]

Besides taxes there is a drastic cost of living difference. A $500,000 home around Atlanta would run $2 mill + around LA.

[thecampster]

Besides taxes there is a drastic cost of living difference. A $500,000 home around Atlanta would run $2 mill + around LA.

That's a good point but you do get it back in resale value down the road.

There are steeper automotive taxes, food costs, etc.

[DrReality]

Remember the movie Escape From LA. Sounds familiar

[Alex]

I am guessing I am in the minority here, but it would very funny if CP3 and Dwight stayed in LA to play for the Clippers.

[Admin]

I am guessing I am in the minority here, but it would very funny if CP3 and Dwight stayed in LA to play for the Clippers.

In the minority as in not knowing its impossible unless by some alternate universe the Lakers traded Dwight to the Clippers for...?