California Taxes Factored Into Bryce Harper’s Free Agency Decision
Even though Bryce Harper signed the biggest free agent contract in the history of sport last month at 13-years worth $330 million, it was almost the San Francisco Giants he went with, and not the Philadelphia Phillies. The Giants reportedly offered a deal at 12-years and $310 million but were turned down by Harper and his representation team. When comparing the two contracts, even if the Giants offered the same exact deal that the Phillies did, it would ultimately end up being worth significantly less in the long run and San Francisco would have had to offer over $330 million to account for what Harper will earn from Philadelphia.
In taking a cursory glance at the two contracts, California’s state income tax rate is 13.3 percent compared to the 6.526 percent that Harper will pay in Philadelphia. The roughly 7 percent difference between the two states amounts to a huge amount of money over the length of the contract. Harper will end up paying about $9.3 million in taxesover the course of his contract with the Phillies.
But was this huge difference in tax rates a true deterrent in his decision to stay in the NL East with the Phillies rather than venture to the Giants of the NL West? Harper’s agent Scott Boras did not tip off to it being the reason, but mentioned that some of these issues come into play more often than not in contract negotiations with players. Boras told KNBR 680 Radio, “It’s difficult for a California team because of the tax issues when you’re doing valuations and you’re in competition with a team that has much more valued tax elements. There are economics involved.” While the difference in net income would have been significant, it looks like there might have been several other additional factors that spurned away Harper from going to the Giants or Dodgers of California.