From May 28th...



Portland Trail Blazers power forward LaMarcus Aldridge will be an unrestricted free agent on July 1. As detailed in an earlier story, the Blazers can offer Aldridge more money and larger annual raises than other teams, but when considering Oregon taxes the Blazers might not have as big a financial advantage as it initially appears.

Aldridge is eligible to sign a contract with a maximum annual salary equivalent to 30 percent of the projected $67.1 million dollar salary cap for the 2015-16 season. That translates to a $20,300,000 salary for next season.

Because Aldridge is making over $413,200 he is subject to a 39.6 percent federal income tax. In Oregon, Aldridge would be subject to a 9.9 percent income tax because he makes over $125,001 in taxable income. For comparison sake, California (13.3 percent) is the only state with an NBA team with a higher state income tax.

If Aldridge were to take his talents to Texas, where both the Spurs and Mavericks are reported to have interest in his services, he would be moving to a state without income tax. Obviously Aldridge has more options than Oregon or Texas, but the juxtaposition of the two most likely destinations offers a glimpse of the impact of state taxes.

Here's the breakdown in state income tax for 2015-16 using taxformcalulator.com.
Oregon
Gross Pay 20,300,000.00
Tax Deferred Retirement 0.00
Cafeteria/other pre-tax 0.00
Circumstance Exemptions 17,250.00
Taxable Income 20,282,750.00
Federal Income Tax 7,983,487.00
Oregon State Income Tax 1,217,553.09
Adjusted Federal Income Tax 7,983,299.00
Social Security 7,347.00
Medicare 294,350.00
Take Home Pay 10,797,074.91
Texas
Gross Pay 20,300,000.00
Tax Deferred Retirement 0.00
Cafeteria/other pre-tax 0.00
Circumstance Exemptions 17,250.00
Taxable Income 20,282,750.00
Federal Income Tax 7,983,487.00
Texas State Income Tax 0.00
Social Security 7,347.00
Medicare 294,350.00
Take Home Pay 12,014,816.00

Assuming the same tax rates over the lifetime of a full max free agent deal, Aldridge would earn $61.99 million post-taxes on a five-year contract signed with the Blazers and $50.1 million on a four-year deal signed with a Texas team. The Blazers ability to offer the extra year helps offset some of the financial burden from Oregon's state income tax.

The tax breakdowns assume that Aldridge claims two dependents (his kids) and does not factor in "jock tax," the tax levied against high income citizens who work in other cities during the year. It also should be noted that Oregon has a 31.1% capital gains tax while Texas is one of nine states with no state capital gains tax.

Professional athletes make a lot of money and their taxes are complicated beyond what has been laid out here. But it's clear that the conventional wisdom that Aldridge would stay in Portland "for the money" is not necessarily accurate.

http://www.oregonlive.com/blazers/in...aldridges.html