Here is an interesting article on how taxes plays a critical role in shaping of NBA’s recruitment and team performance.
From Bill Bradley of the SacBee (Hat tip SM Oliva Mises Blog)
“The absence of state income tax in Florida and Texas is a big reason the Miami Heat and Dallas Mavericks can be active in free agency.
“Compare that to the New York Knicks, whose players have to pay combined state and city income taxes of 12.618 percent. That means Amar'e Stoudemire's five-year, $99.8 million deal with the Knicks is worth about $12 million less than if he had signed with the Heat.
“While athletes are taxed by other states when playing road games, they come out well ahead if they live in Texas or Florida.
“Yes, these Florida and Texas teams had to have salary cap space to get involved in this circus. Yes, they wanted to improve their rosters.
“But think about this: There are five NBA teams in Florida and Texas. Those are the only teams without state income tax. All five are among the most competitive in the league. (bold highlights mine)
Bottom line: taxes function as a major influence on how resources or manpower are allocated, and this is obvious even in sports!
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