Saturday, March 2, 2019

Did California Taxes Stop Bryce Harper From Signing With the San Francisco Giants?

Bryce Harper
By David Boaz

Has California lost another centi-millionaire because of its high tax rates? Washington Nationals superstar Bryce Harper just signed a 13-year, $330 million contract with the Philadelphia Phillies, the largest contract in the history of major North American sports. (Though not the largest when adjusted for inflation.) Some reports say that the San Francisco Giants came very close in the competition but lost out because of California’s taxes. Alex Pavlovic of NBC tweeted:

I’m told Giants made a 12-year, $310 million offer to Bryce Harper. They were willing to go higher but would have had to go well over $330 million to get it done because of California taxes.
If taxes did keep Harper on the East Coast, he wouldn’t be the first sports star to make such a decision. Trevor Ariza, a member of the Los Angeles Lakers’ 2009 NBA championship team and by 2014 “a key part of the Wizards’ playoff run,” decided to leave Washington and join the Houston Rockets. Why?
Washington was disappointed but hardly shaken when Ariza chose to accept the same four-year, $32 million contract offer in Houston, where the 29-year-old could pocket more money because the state doesn’t tax income.
As I wrote then, yes, a $32 million salary – or indeed a $32,000 salary – goes further in Texas than in the District of Columbia. What economists call the “tax wedge” is the gap between what an employer pays for an employee’s services and what the employee receives after taxes. It causes some jobs to disappear entirely, as employees and employers may not be able to agree on a wage once taxes are taken out of the paycheck. It causes some employees to flee to lower-tax countries, states, or cities. The Beatles, the Rolling Stones, Bono, and Gerard Depardieu are some of the better-known “tax exiles.”
It isn’t just entertainers and athletes, of course. A 2018 study found that 138 millionaires left California after a 2012 tax increase. Millionaires have also been seen leaving ConnecticutNew York, and New Jersey. Last fall Chris Edwards wrote about the impact of taxes on interstate moves.
As taxes rise in many states, no-income-tax states like Texas, Florida, Washington, Tennessee, and Nevada may become increasingly attractive to athletes, entertainers, and other high-income producers.
The above originally appeared at


  1. Don't some states tax you by applying their income tax on the earner if you work a certain minimum number of days in their state, like a 3-game weekend series or a week-long trip composed of a series of sales meetings? So did he really escape? High earners like Harper probably make it worthwhile for tax harvesters to track big-name celebrities who come into their geographical jurisdiction.

    1. There is a difference between being taxes 3 days and 200 days.

    2. We're not disagreeing. Just saying they will still try to get his money.

  2. I hired a guy from Idaho, he can make 3 times the wages working for me in Alaska than in Idaho ($500-850 a day vs $175-200 a day), and when he did his state taxes, he was shocked that Idaho made a claim on his wages even though he wasn’t even in the state. Actually, he was flaming mad. It was a good opportunity for a little education. He will be moving here permanent as soon as his oldest son graduates. Alaska has no income tax, although I suppose it’s not as an appealing place to come to as maybe Texas or Florida. Unless you love freedom. Then it’s way more appealing.