LeBron Leaves Miami To Pay Higher Taxes In Cleveland

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"LeBron Leaves Miami To Pay Higher Taxes In Cleveland"

Heat Cavaliers Basketball

CREDIT: AP

Whenever athletes move around in free agency, conservative anti-tax groups like to pick and choose a few who left high-tax states for low- (or no-) tax states to make a simple, ideological point: that if states and cities and even America as a whole would lower its income tax rates or eliminate them altogether, they would be more competitive and attract more and better labor and capital.

It happened in 2010, for instance, when LeBron James left the Cleveland Cavaliers for the Miami Heat. That he chose the Heat over the New York Knicks, the New York Post exclaimed, was a reason to “blame our dysfunctional lawmakers in Albany, who have saddled top-earning New Yorkers with the highest state and city income taxes in the nation.” The Drudge Report asked if high taxes influenced his decision. The Washington Examiner posited that he chose Miami over the Chicago Bulls to “avoid Illinois taxes.”

Now, however, James has returned to Ohio, where the income tax is higher than the 0 percent rate Florida levies, so don’t expect a similar drumbeat of anti-tax madness (unless, of course, they argue that Gov. John Kasich’s tax cuts are the reason James feels more comfortable going back, or something). That isn’t to say James won’t feel the impact of state taxes — Kiplinger estimates that he’ll pay about $1.19 million in state taxes on his basketball salary alone. And while athletes, according to at least one study, often do make decisions based on tax rates, they can do so because they are highly skilled and highly mobile — other populations simply don’t weight their tax rates that heavily. Even data on wealthy people who can move more easily than middle- and low-income people shows that they’re not all that responsive to higher tax rates when choosing where to live — or picking up and moving from where they are now.

To the extent that taxes are a factor for most people, they are a small one, and in this instance LeBron is illustrative of that. It’s unlikely that he actually wants to pay higher taxes, but he does want to live and work in Cleveland: “My relationship with Northeast Ohio is bigger than basketball. I didn’t realize that four years ago. I do now,” James wrote in the Sports Illustrated essay announcing his decision. “My presence can make a difference in Miami, but I think it can mean more where I’m from. I want kids in Northeast Ohio, like the hundreds of Akron third-graders I sponsor through my foundation, to realize that there’s no better place to grow up. Maybe some of them will come home after college and start a family or open a business. That would make me smile. Our community, which has struggled so much, needs all the talent it can get.”

In other words, James wanted to go home because he felt a yearning to help his hometown. There are other factors that people consider too: they live where they do because they want to be around family and friends, or they move/live somewhere because it is most appropriate for their careers, or because that’s simply where they want to live. James’ essay makes it obvious that all of those are true for him. His relationship with Northeast Ohio is bigger than his tax rate, and for most people, the decision about where to live and work is far more complex than that too.

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