The price of liberal cosmopolitanism
And no, I’m not being merely figurative here: “Pitcher Loses $12M to Taxes by Signing with Yankees Instead of Diamondbacks, Cubs”:
However sweet this $155 million dollar deal seems, the reality is that Masahiro Tanaka will lose almost $90 million over the seven-year life of his contract with the Yankees
As reported by ESPN, the New York Yankees have signed Masahiro Tanaka to a 7-year contract worth $155 million, earning an estimated $22.1 million per year. According to ESPN, Tanaka’s contract is the largest ever for an international free agent and the fifth-largest deal for a pitcher.
However, as sweet as this $155 million dollar deal seems, the reality is that Tanaka will lose almost $90 million over the seven-year life of his contract with the Yankees.
In addition to the Yankees, Tanaka was also being courted by the Arizona Diamondbacks and the Chicago Cubs. Unlike New York City, the cities of Phoenix and Chicago do not impose a city income tax.
Had Tanaka chosen a contract with the Diamondbacks or the Cubs, he would have saved almost $12 million over the life of his contract. Even if these teams offered him millions less, he could’ve come out ahead.
Instead, Tanaka chose New York, where the state and local rates are some of the highest in the country. By choosing to sign with the Yankees, Tanaka automatically forfeited almost $12 million in taxes that would have been saved had he signed with the Cubs or Diamondbacks.
And of course, we all know that Chicago, at least, recoups what it doesn’t charge in city income tax with all sort of regulatory burdens, tolls, usage taxes, etc., so that at the end of the day, the lure of playing for the “lovable losers” — who aren’t very lovable, and whose fans have been burnished and cleansed in mythology while in reality they are among the most belligerent and boorish (sorry, but this observation comes to me from a Chicagoan, not to mention an infamous rant from a former Cubs manager) — is very similar to deciding to take a giant pay cut to have your life micromanaged by a corrupt political machine, and then throw in wind and ice and snow as a constant soul-sucking bonus.
To a Japanese player, the thrill of playing in Yankee pinstripes may have outweighed the financial advantage of playing for a team in Arizona. Perhaps Tanaka is already financially secure, and he — like others before him — is drawn to the remarkable history of the Yankees. And that’s a personal decision, one I don’t begrudge him. Too, New York may remind him of Tokyo in its bustle and scope, also an appeal.
Still, the point remains: the cost of living in the land of the nannystate, formerly run by a billionaire anti-soda czar with a tyrant streak the size of his ego and now run by a practically open communist, has its enormous costs. And when all the infrastructure and security and restructuring laid by Giuliani is finally pissed away in crony deals and yet more entitlements that compensate for the loss of jobs due to confiscatory taxes and over-regulation, playing in the New Bronx Zoo — a recasting of the Carter years — may not look so glamorous any more.
And moving to Connecticut and commuting is probably not as sexy as it sounds, even if David Letterman makes it look relatively painless.