By Monte M. Korn
Why did LeBron James dump Cleveland for Miami?
It’s taxes! Taxes! Taxes!
LeBron is jumping to the Miami Heat from the Cleveland Cavaliers to save a ton of money on city and state income taxes.
Florida has no income taxes.
The income tax rate in Akron, Ohio, is a little more than 7%.
According to an analysis by Richard Vedder, an economist at Ohio University, Mr. James’ net present value tax savings on his salary are between $6-8 million be year by living in Miami versus his home town of Akron, Ohio.
In addition, the millions of dollars received from product endorsements would be taxed at Florida rates rather than Ohio rates.
Had LeBron gone to the New York Knicks, New York would have taken upwards of $12 million from LeBron’s earnings.
The Cleveland basketball fans should allocate some of their wrath on the Ohio politicians who keep driving high income individuals and their businesses to states that have no taxes on their income.
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Material for this column taken from the Wall Street Journal: “LeBron’s Tax Holiday.”
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Monte M. Korn is an attorney practicing law in West Bloomfield, has been a member of the State Bar of Michigan since 1942, and is a member of the Probate and Elder Law Sections of the State Bar.
Monte Korn is the talk show host of “Open Line with Monte Korn” on radio station WNZK am690 every morning at 11 a.m. He can be reached at (248) 933-4334.
The material in the above article is the research of Monte M. Korn. The Detroit, Oakland County, and Macomb County Legal Newspapers have no responsibility therein.
