The Cliff Lee decision, barring any unforeseen final efforts like the Nationals offering Jayson Werth-like money, seems to be narrowed down to the Texas Rangers and the New York Yankees.
If both are offering seven-year deals and both are dangling similar amounts of money, then what might be the tipping point for Lee?
I would argue that the decision-making factor for Lee might be the same one that swayed LeBron James in his decision to go to Miami.
Now, I am not pretending that this was the only issue in James’ decision, but I can’t help but feel that it was certainly a big-time factor.
LeBron decided not to go to the New York Knicks. Instead, he opted for the Miami Heat. Miami, being located in Florida, has no personal state income tax, whereas New York taxes at nine percent, among the highest in the country.
Did this influence LeBron’s decision? I don’t know. Will it influence Cliff Lee’s decision that the Texas constitution restricts a personal income tax? Let’s take a closer look.
New Yorkers will argue, and they may have a point, that Cliff Lee will make more money as a Yankee than as a Texas Ranger simply from the all of the off-field things that Yankees tend to bank more coin doing: appearances, autograph signings, endorsements in New York vs. those in Texas, etc.
But that money is income-earned outside of and in addition to the contract that he’ll sign. More income, mind you, on which he will pay more taxes.
Let’s just focus on the tax issue as far as his contract is concerned. He will be playing the majority of his games (home games) in either Texas or New York.
This means that the majority of the time he will be paying the income taxes in either of those two states. The Rangers also play additional games against Houston, which being in Texas, will save Lee more money.
Also consider where Cliff Lee would live. If you play for New York you would probably want to live in Manhattan. If you choose to reside in that borough, and why wouldn’t you, then you will be adding roughly an additional four percent city tax to your already huge tax burden.
Sure, Cliff Lee could live in New Jersey or Connecticut in order to save some tax money but if that is his train of thought then he would just sign with Texas and not pay those taxes in the first place.
The Steinbrenners, however, have come up with a pseudo-solution to the corner in which their tax-heavy state has painted the Yankees.
It is rumored that the Steinbrenners have been known to pay the local taxes for their players as an enticement to sign with the Bombers. Not a bad deal.
Plus there are accountants more than willing to work with a player like Cliff Lee who can shelter his money from these taxes through certain deductions, etc…
So, will the tax price tag that comes with living in one of the most expensive cities in America push Cliff Lee to stay in the Lone Star State or will he go for the pinstripes and pay income tax?
At the amount of money Lee is going to make, I am not sure it will even matter to him. But if he is listening and the tax burden is not an issue to Cliff Lee, then I propose that he stay in Texas and take nine percent of his income and make the check out to Jeff Cockey. Or he could give it to a charity, I suppose.