For Cam Newton, Adding Super Tax Insult to Super Bowl Injury | Cato @ Liberty - Daniel J. Mitchell:
February 8, 2016 - "Today, let’s focus on the importance of low tax rates and Cam Newton of the Carolina Panthers is going to be our poster child....
"Writing for Forbes, a Certified Public Accountant explains why the quarterback for the Carolina Panthers lost twice at the Super Bowl.
"More specifically, the tax-addicted California politicians impose taxes on out-of-state athletes based on how many days they spend in the Golden State.... States tax a player based on their calendar-year income. They apply a duty day calculation which takes the ratio of duty days within the state over total duty days for the year.
"Now let’s look at the tax implication for Cam Newton.
"The good news, at least for football fans, is that Cam Newton has a contract that prevented him from staying home and skipping the game. So he didn’t have any ability to respond to the confiscatory tax rate.
"Many successful taxpayers, by contrast, do have flexibility and they are the job creators and investors who help decide whether states grow faster and stagnate. So while California has the ability to pillage Cam Newton, the state is basically following a suicidal fiscal policy because other people can choose to stay away."
Read more: http://www.cato.org/blog/cam-newton-adding-super-tax-insult-super-bowl-injury
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February 8, 2016 - "Today, let’s focus on the importance of low tax rates and Cam Newton of the Carolina Panthers is going to be our poster child....
"Writing for Forbes, a Certified Public Accountant explains why the quarterback for the Carolina Panthers lost twice at the Super Bowl.
Remember when Peyton Manning paid New Jersey nearly $47,000 in taxes two years ago on his Super Bowl earnings of $46,000? …Newton is looking at a tax bill more than twice as much, which will swallow up his entire Super Bowl paycheck, win or lose, thanks to California’s tops-in-the-nation tax rate of 13.3%."You may be wondering why California is pillaging Cam Newton since he plays for a team from North Carolina, but there is a legitimate 'nexus' for tax since the Super Bowl was played in California....
"More specifically, the tax-addicted California politicians impose taxes on out-of-state athletes based on how many days they spend in the Golden State.... States tax a player based on their calendar-year income. They apply a duty day calculation which takes the ratio of duty days within the state over total duty days for the year.
"Now let’s look at the tax implication for Cam Newton.
If the Panthers [won] the Super Bowl, Newton [would have earned] another $102,000 in playoff bonuses, but if they [lost] he [would] only net another $51,000. The Panthers will have about 206 total duty days during 2016, including the playoffs, preseason, regular season and organized team activities (OTAs).... Seven of those duty days will be in California for the Super Bowl.... To determine what Newton will pay California on his Super Bowl winnings alone, looking at the seven days Newton will spend in California this week for Super Bowl 50, he will pay the state $101,600 on $102,000 of income should the Panthers be victorious or $101,360 on $51,000 should they lose."So what was Cam’s marginal tax rate for playing yesterday?
Losing means his effective tax rate will be a whopping 198.8%. Oh yeah, he will also pay the IRS 40.5% on his earnings."[H]e’ll be paying about $101,000 of extra tax simply because the game took place in California. However, if the Super Bowl was in a city like Dallas and Miami, there would have been no additional tax.
"The good news, at least for football fans, is that Cam Newton has a contract that prevented him from staying home and skipping the game. So he didn’t have any ability to respond to the confiscatory tax rate.
"Many successful taxpayers, by contrast, do have flexibility and they are the job creators and investors who help decide whether states grow faster and stagnate. So while California has the ability to pillage Cam Newton, the state is basically following a suicidal fiscal policy because other people can choose to stay away."
Read more: http://www.cato.org/blog/cam-newton-adding-super-tax-insult-super-bowl-injury
'via Blog this'
This work by Cato Institute is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License.
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