this was posted by supersub on the raptors forum. it's mainly about bosh but applies to other free agents for 2010. it's an intersting analysis:

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We are hearing more and more about the possibility of the salary cap decreasing over the next two years. If this is correct, this leads to some interesting salary cap implications in the summer of 2010.

The current NBA salary cap is $58.68M. In 2006-2007 the salary cap was $53.135M, and in 2007-2008 the salary cap was $55.63M, meaning that the last two years have seen 4.69% and 5.48% increases in the salary cap. Now a few months ago, it was expected that the salary cap would continue to rise; if we assume a 5% increase per year, then for the summer of 2010, the NBA would be looking at a salary cap of about $64.69M. Because players with seven years of experience can make 30% of the salary cap as their base salary, under that scenario, Chris Bosh could have had his next contract start at about $19.41M – and teams like the Knicks and the Cavs would easily be in position to sign two players to maximum contracts.

However, the economy sucks donkey balls right now, and a 5% increase over the next two years is not likely to happen. Sports are clearly not immune to this recession; in fact, there are reasons to believe that the business of sports could be impacted even more negatively than everyone else. So let’s assume that NBA revenue does decline in such a way that the NBA salary cap does decrease over the next two years.

If the NBA salary cap decreases by 3% per year over the next two years (very conservative), then in the summer of 2010 the salary cap would be $55.31M, and a maximum contract for a player with seven years experience would be 6Y, $129.4M. The maximum contract that another team could offer Bosh would be 5Y, $96.2M. The difference would be $33.2M.

Teams currently in position to have at least $18.6 million in cap space in 2010:
Atlanta Hawks, Chicago Bulls, Cavaliers, Detroit Pistons, Golden State Warriors, Houston Rockets, L.A. Clippers, Memphis Grizzlies, Miami Heat, Minnesota Timberwolves, New Jersey Nets, New York Knicks, Oklahoma City Thunder, Phoenix Suns, Portland Trail Blazers, Sacramento Kings, San Antonio Spurs, Utah Jazz

If he bolts to one of these teams, Chris Bosh would lose $33.2M, but can he recoup some of that cash in saved taxes?

US Federal Tax is 35%, whereas Canadian Federal Tax is 29%. However, State income tax rates differ between States. Here are the tax rates and the after-tax take-home salary for a person making UDS$1,000,000 in the states that have an NBA team.

State/Prov.    Tax Rate     Salary
Florida         0.00%    $650,000.00
Tennessee       0.00%    $650,000.00
Texas           0.00%    $650,000.00
Washington      0.00%    $650,000.00
Illinois        3.00%    $620,000.00
Pennsylvania    3.07%    $619,300.00
Indiana         3.40%    $616,000.00
Michigan        4.35%    $606,500.00
Arizona         4.54%    $604,600.00
Colorado        4.63%    $603,700.00
Utah            5.00%    $600,000.00
Ontario        11.16%    $598,400.00
Massachusetts   5.30%    $597,000.00
Oklahoma        5.50%    $595,000.00
Georgia         6.00%    $590,000.00
Louisiana       6.00%    $590,000.00
Ohio            6.24%    $587,600.00
Wisconsin       6.75%    $582,500.00
North Carolina  7.75%    $572,500.00
Minnesota       7.85%    $571,500.00
New Jersey      8.97%    $560,300.00
Oregon          9.00%    $560,000.00
California     10.30%    $547,000.00
New York*      12.14%    $528,600.00

*NY state income tax rate includes a 4% city income tax levied by New York City.

If he re-signs with the Raptors, his take-home income over the life of the contracts would theoretically be $77,432,960. Now, how much would he really lose in after-tax money, if he were to sign with any of the aforementioned teams:

Team                   Take-home               Loss
New York Knicks         $50,851,320.00    -$26,581,640.00
Golden State Warriors   $52,621,400.00    -$24,811,560.00
L.A. Clippers           $52,621,400.00    -$24,811,560.00
Sacramento Kings        $52,621,400.00    -$24,811,560.00
Portland Trail Blazers  $53,872,000.00    -$23,560,960.00
New Jersey Nets         $53,900,860.00    -$23,532,100.00
Minnesota Timberwolves  $54,978,300.00    -$22,454,660.00
Cleveland Cavaliers     $56,527,120.00    -$20,905,840.00
Atlanta Hawks           $56,758,000.00    -$20,674,960.00
Oklahoma City Thunder   $57,239,000.00    -$20,193,960.00
Utah Jazz               $57,720,000.00    -$19,712,960.00
Phoenix Suns            $58,162,520.00    -$19,270,440.00
Detroit Pistons         $58,345,300.00    -$19,087,660.00
Chicago Bulls           $59,644,000.00    -$17,788,960.00
Houston Rockets         $62,530,000.00    -$14,902,960.00
Memphis Grizzlies       $62,530,000.00    -$14,902,960.00
Miami Heat              $62,530,000.00    -$14,902,960.00
San Antonio Spurs       $62,530,000.00    -$14,902,960.00

Signing with Miami, Houston or San Antonio would guarantee him a loss of only around 3M per year over the life of the contract, and puts him back on the market at age 31 (not 32, in the case of Toronto). Obviously, there are certain deductions and tax strategies that can be employed to minimize the tax bill that are more generous in the States (like the interest on mortages, full deduction on charitable donations, etc.).

The gap in salary between the 2 isn't as steep as our media is making it out to be.

good read. thanks dj

This analysis is good, but I think there are flaws. Comparing a 5 year contract to a 6 year contract and calling the difference a straight loss is not correct. Guaranteed money beats risky dollars, but assuming both the 5 and the 6 year contracts have player options after the third year, the real difference should be the dollars in the first three years. The risk of injury is a substantial concern, but not enough to bring the value of an additional year after a non-bird contract to $0.

The differences is salary as set forth in the original analysis aren't that great. You could also get into cost of living, quality of life, etc... Overall, I think players that sign in NY are not going to worry about a couple dollars. Either you want the spotlight or you don't.

From what I'm reading:

The NY City income tax is only for city residents. If you work in NY City but live outside the city, you do not owe NY City resident income tax.

Nothing is guaranteed, you have to perform. But winning a ring in NY will make you mega-millions in endorsements...

The analsis is missing some importatnt facts including the effect of state taxes on federal tax. US Citizens working in Canada are still subject to us tax as well as state tax where they live and it doesn't account for Canadian provincial tax which is similar to state tax. Also there is tax by states and Canadian provinces on non residents for earning attributable to the various states in which they work.

Right, I was specifically talking about the NY City tax.

I cannot recall any big time players who came to play in NY.
Some became starts in NY... and then get traded away.
So if this will do happened with LeBrone or some other big name it will be some new thing.
I do not believe in new things; it's all same stuff all over again.