Baseball Agents Expressing Concern Over Anticipated Tax Increases
The election of Barack Obama to a second term as President of the United States has some baseball agents posturing about how their players will be affected economically (via taxation) and team executives responding in kind. Recently, Ronald Blum of the Associated Press spoke to several baseball influencers who opined on the subject with differing responses.
On one end of the spectrum was baseball agent Greg Genske of The Legacy Agency, who emailed Blum,
“Front-loading would make sense if at all possible as tax rates will definitely go up on January 1st on all high-income taxpayers. The only question is HOW MUCH will the rates increase????”
Baseball agent Craig Landis of Landis Baseball Group, LLC did not seem convinced that tax rates will play a huge role in contract negotiation. He said,
“It’s a factor, maybe even a small factor. If there’s 50 variables, you can now make it a 51st. It’s not usually going to be the drive, but it’s something to consider.”
And then Billy Beane, general manager of the Oakland Athletics and a main focus of the movie, Moneyball, stated,
“I think if you’re hopping around the potential of tax reform, you’re probably chasing your tail. If they can predict when something’s going to happen, then they’re much further ahead than the lawmakers.”
Beane’s statement should be respected. A lot can (and probably will) change concerning tax reform prior to the start of the new year, so the panic (maybe better to call it “concern”) may be misplaced. However, if an analysis conducted by a tax lawyer at Boras Corp. is correct, then may be there is a cause for concern. As noted by Blum,
According to an analysis done by a tax lawyer on the staff of agent Scott Boras, a player with a $10 million salary and average deductions who plays in Florida and is a resident of that state will see his taxes rise from $3.45 million this year to $4.09 million next year under current law. If traded to the Blue Jays, that player’s 2013 tax would rise to $4.27 million. And if dealt to a California team, the tax would go up to $4.4 million.