written about bosh but applies to all FA's looking for that big deal and 6 years...
A timely little reminder why that $30 million matters to CB4For those thinking CB4 might just sign a five year deal and leave us empty-handed this summer, here's another reminder of why he will view the six year, $133 million deal as a must have.
I've previously listed the deductions on a player's contract: 9% for escrow - money which goes to the league; 6% to his agent.
Then comes tax. The top US federal tax in Texas, IIRC, is 35%, with no state tax, but with the expiration this year of the Bush tax cuts, the top rate goes to 39.5%. And last night, the health care vote in the House added another 5.3% surcharge on millionaires.
Yes, the Raptors and Leafs employ tax structures that reduce the top rate combined Canadian/Ontario rate of 45% a bit by having the player effectively remain a Florida or Texas resident for tax purposes. But when the US rate was 35% in Texas and Florida, players were still paying less tax to play for teams in those States. Now, that gap is rapidly closing.
The point I'm making is not that this tax parity makes it more likely Bosh stays or doesn't. It's that more than 60% of any contract he signs under the current CBA now will go to taxes, his agent and escrow.
So those who think he'll leave $30 million on the table are crazy. That would be leaving another $12-13 million in after tax money on the table. $12 million doesn't sound like a lot until you consider that the first $100 million is really becoming $40 million after tax, escrow and his agent's cut.
And since the new CBA will make it harder to recover the lost money, I would think that getting the biggest, longest contract will be imperative for him and other free agents, also because if the latest tax is ever repealed - and the Republicans certainly will try - the bigger the contract the more the after tax money will rise.
