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Hoping to make a long-awaited splash in free agency, the Mavericks met for a few hours with free agent big person Dwight Howard on Tuesday, one of his last stops on his semi-annual You Know You Want Me Tour.
If the experts are to believed, it will come down to the incumbent Lakers and two Texas teams, Houston and Dallas, who can dangle the all-important carrot that lures all title-craving star athletes: a massive tax break.
While people in Dallas and Houston are offering up all sorts of free stuff — and while Howard, scarily, seems almost weird enough to actually be swayed by such frivolity — his tax burden will play a big role in making either Texas team more attractive financially than other suitors, especially non-Texas teams that aren’t the Lakers, like Golden State and Atlanta.
Via ESPN, accountant Robert Raiola explains:
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If he claims California as his primary residence and stays with the Lakers, Howard will gross $118 million off a five-year max contract, but will net only $59.6 million, according to Robert Raiola, a certified public accountant with FMRTL in Cranford, N.J., whose clients include athletes.That’s because California has the highest state income tax in the U.S. Any person who is single — Howard is not married — earning more than $1 million in the state pays a top rate tax of 13.3 percent.
Howard could get only a four-year max deal by going somewhere else and would make $1.7 million less per season, but could still come out on top if he signs with the Houston Rockets or Dallas Mavericks and makes his home in Texas, a state that has no income tax.
Over a four-year period, Howard would gross $94.4 million off a contract with the Lakers and $87.6 million from a contract with an NBA team in Texas, but Raiola says the difference in the state income tax between California and Texas would result in Howard netting $2.6 million more from a Texas-based team. That’s even including jock taxes, which are the taxes Howard would have to pay states when he plays on the road.
Between that, James Harden, the chance for Howard to put several states between himself and the increasingly insane Kobe Bryant, and free kolaches, Houston has to be the frontrunner. But Dallas is still in it, for better or worse.
