Giancarlo Stanton just took a $32m pay cut to play for the Yankees

by Moshe W.

Giancarlo Stanton was traded from the Florida Marlins to the Yankees. The move will cost him $32m because while Florida has no state income tax, New York city and state both do.

New York state has an 8.82% tax rate and New York City has a 3.88% rate. Stanton is personally owed $265m over the next ten years (after subtracting 10% for his agent). His local tax bill will therefore be $32m. In years past, this would be partially offset by the deductibility of his local taxes against his far larger Federal tax bill. The current tax “reform” bill nearing completion in Congress, however, removes the deductibility of local taxes, so Stanton is going to get hit with the full bill. In effect, Stanton just took a $32m pay cut to play for the Yankees.

Illinois state tax is 3.75%, so Stanton would have only taken a $10m pay cut to play for the Cubs.

This is not technically Cubs news, but it is baseball financial news, and it is funny. Just some fun facts for your holiday get together.

Comments

I thought state taxes were determined by the number of games played in a specific state. So yes Stanton will pay more because the majority of his games will now be in NY, but its not to this degree. https://www.accountingweb.com/tax/individuals...

You are absolutely correct. The numbers should be halved. My bad.

I'm just glad not to be a tax accountant for a MLB player. That seems like a real nightmare, I appreciate your efforts on helping explain these details. I remember hearing once that players are even taxed on tickets received as comps.

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