James Harden might win a title with the Brooklyn Nets–and the value of that would be "priceless"–but his trade to New York will cost him as much as $13.6 million in new income taxes. @SportsTaxMan and I break down the numbers in a new @Sportico story: https://t.co/RDPgVuL9Yd
— Michael McCann (@McCannSportsLaw) January 13, 2021
Joe Rogan and Elon Musk are heading to Texas, and we can speculate that their moves might have something to do with the tax relief found in the lonestar state. Meanwhile, James Harden decided to go the opposite direction, bringing his talents and his employee ID number to the worst place in America for making the most out of your salary: New York City.
Harden also leaves Texas, one of nine states without an income tax on wages, for New York, one of the nation’s highest taxing states. While Harden will continue to be owed the same amount of money over the next three years, his pay will be subject to an approximately 12.7% tax rate between New York State and New York City.
The short of it: He’ll pay an additional $13.6 million in taxes over the next three years.
Beyond taxes, Harden will experience a far higher cost of living in New York than in Houston. According to Nerd Wallet, it is 92% more expensive to live in Brooklyn, and 165% more expensive to live in Manhattan, than in Houston.
It’s easy to say that when you’re making the money Harden is making, $13.6 million doesn’t matter; that’s a rounding error to him. But when you actually take a look at your paystubs and see the chunks that go to the city, it’s pretty demoralizing. For the first few years that I lived in New York, I would look. And then I decided that it was more important to be happy in my life. You can only puzzle over the line items of mysterious taxes and fees that read like an Uber Eats receipt during a snowstorm for so long before it’s time to take some deep breaths and accept that you’re getting boned.
At this point in his career, a ring is invaluable to Harden. I’m sure he’d happily forfeit that $13.6 million as a ring tax, if he can get it done with Durant and Kyrie.