yeah, boo hoo poor guy is only making 200k a game. how can they live off that!?
A professional athlete has a very limited earning window. Football contracts are not even guaranteed for injury. And often the post career earning potential is very limited. Armstead needs to earn enough money now to live and support a family for 40 years. So the “how can he live off that” take shows a complete lack of understanding.
And for an athlete, you also have to account for agent/management fees and other costs likes trainers, etc. So the $200k number isn’t even that.
I went round and round with a friend in Georgia on this. I had to work the numbers and even then he had trouble believing me. But due to the difference in income tax structure, a married couple paid more state income tax in Georgia than California until their taxable income exceeded $150,000 per year. The difference was that Georgia had a flat tax rate in excess of $10,000 per year income whereas California has a progressive tax rate, where the initial tax bracket starts well above $10,000 per year. The sales tax and property tax rates were not significantly different between the two states.
So for regular earners do not just assume that California taxes are high, or even higher than in other states. Check everything in the tax structure carefully, and you might be surprised.
Now, California does have higher property values. That may impact the cost of living. But then you don’t need heavy winter clothes, and you don’t need to winterize either your car or your house. So put a lot of effort into calculating the true cost of living in comparable areas.
$150k is coastal California is very different than most parts of Georgia. Everything is more expensive here starting with mortgage/rent and including energy costs. For a family of 4, $150k goes much further in most places outside of CA.
While California taxes are high, and I do think our state leaders waste too much of our dollars, every state gets what it needs. Or they cut back on services.
If a state has no income tax, they are getting it from property, sales, or anywhere else.
For players it is moot since most are not long term residents. But for CA residents, especially long term, Prop 13 keeps property tax increases in check.
Most states re-assess based on current value. For long term residents they pay on an unrealized monetary increase in their home value.
John
Prop 13 is a red herring. It primarily benefits old people and their children who inherit - not anyone buying a house today. It is a senior entitlement. Also generally most property taxes go to local authorities, not the state (or to the state and then back to local communities for schools).
Yes - states w/o income tax have to generate money in other ways. Typically this is business taxes or other types of fees (transfer taxes for real estate is a major one in Florida, for example). But the biggest difference is spending. California’s state budget dwarfs other states which necessitates the higher taxes. The CA budget/spending is roughly twice per capita than Texas and Florida. That may be a good thing - depending on priorities/politics/etc. I’m trying my best not to be political - it may be a good thing. But that reality drives taxes.
I don't know about US taxation system, but in all honesty: the average of taxation in Germany is around 45% and with so-called "progression", people might even pay up to 70% in taxes. I know for a fact that I had some 57% deductions in taxes due to double-taxing on Christmas benefits a few years ago. So, what exactly is the problem with Cali taxes and why are people so obsessed with it?
As others have pointed out, the US tax system is different because each state has a different system. Also some cities have income taxes (e.g, New York City). I’d also point out that in many “high tax countries” things like healthcare and college/advanced education are free (not sure about Germany, but this is the case in much of Europe). That is not the case in the US. So it is not just a matter of the overall tax rate but also what services are being provided.