California takes the approach to state income taxes the way the Feds tax businesses. If you do any business in California, earn any income in this state, you will be taxed based on your entire yearly earnings.
Remember when Peyton Manning paid New Jersey nearly $47,000 in taxes two years ago on his Super Bowl earnings of $46,000? Manning has nothing on the state taxes facing Carolina Panthers quarterback Cam Newton for Super Bowl 50 in Santa Clara, Calif. Newton is looking at a tax bill more than twice as much, which will swallow up his entire Super Bowl paycheck, win or lose, thanks to California’s tops-in-the-nation tax rate of 13.3%.
Before we get into the numbers, let’s do a quick review of the jock tax rules applied to professional athletes (similar tax rules apply to anyone doing business across state lines, but they are rarely enforced). States tax a player based on their calendar-year income. They apply a duty day calculation which takes the ratio of duty days within the state over total duty days for the year. That ratio is then multiplied by the player’s salary to arrive at a state’s allocable income. […]
Skip ahead two years and now Manning is back in the Super Bowl against the highly-talented and highly-compensated Cam Newton, who signed a five-year, $103.8 million contract extension in June. Newton has already earned $58,800 so far this year for week 17 of the 2015 season and $71,000 in playoff bonuses. Newton is due a $10 million signing bonus and $13 million in base salary for the 2016 season, which he will receive the full amount during the regular season. Luckily, week 17 next season will occur on New Year’s Day 2017, thus shielding about $765,000 from California’s grasp.
If the Panthers win the Super Bowl, Newton will earn another $102,000 in playoff bonuses, but if they lose he will only net another $51,000. The Panthers will have about 206 total duty days during 2016, including the playoffs, preseason, regular season and organized team activities (OTAs), which Newton must attend or lose $500,000. Seven of those duty days will be in California for the Super Bowl and another four will be in the Golden State for road games against St. Louis Los Angeles and Oakland next season. […]
Newton will pay California 99.6% of his Super Bowl earnings if the Panthers win. Losing means his effective tax rate will be a whopping 198.8%. Oh yeah, he will also pay the IRS 40.5% on his earnings.
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Greetings:
Unregretably, Mr. Newton’s undire predicament provokes no empathy from me. Perhaps if he figured out how to uncover his pate during the playing of our National Anthem, changed his jersey number, and limited his African-American whines my opinion would alter.
As to that first necessary amendment, what disturbs me somewhat more is how the fawning media, which pours over any available bit of an idea about the Super Bowl, refuses to discover or mention Mr. Newton’s proclivity which regretably is shared by so many of his fellow players.
11B40
I make no judgements on Newton the man; but if I can’t protest an injustice visited on a cad, I can’t protest the same injustice on a good man.
The same kind of tax madness penalizes everyone, even if rarely enforced on lesser-profile people, because it is there, waiting to be used, when you cross the King.
Greetings, Darleen:
Sorry for the upset, but I didn’t say anything about your protesting anything. What I offered was my reaction to the posting.
Obviously, I have made some judgments on Newton the man and find him not only wanting but still headed in the wrong direction.
No worries 11B40 … I always appreciate your comments, was just clarifying my main point.
I don’t follow professional sports much at all, and the Super Bowl has become mostly a date for partying.
And any pro-athlete that disses the country that gives him/her the freedom to make $ for what is entertaining the masses needs to be called out on it.
what california is doing is racist and sick
they doing with the tax code what they can’t do anymore on their cotton plantations
Just remember, Broncos are people too. Orange lives matter.
Hands up! Don’t tackle!
Greetings:
For when them cotton balls get rotten
You can’t pick very much cotten,
In them cotton fields off of I-5
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