California's sky-high personal income tax rate – and Pennsylvania's low flat rate – might have loomed large in superstar slugger Bryce Harper's decision to sign with Philadelphia, the Los Angeles Times reports.
According to the L.A. Times, the three worst teams to sign with because of their state taxes are the Los Angeles Dodgers, San Diego Padres, and San Francisco Giants – all in California where the highest state rate in the nation tops out at 13.3 percent.
Pennsylvania, on the other hand, has a low flat rate of 3.07 percent for every taxpayer regardless of income.
So, in signing with the Phillies for $330 million instead of California, Harper will save tens of millions in taxes, the news outlet reported.
"With a contract of that magnitude, it's dramatic," Scott Boras, Harper's agent, told the L.A. Times about the taxes. "It could be almost a full year's compensation."
"The Giants, Dodgers, and Padres are in the worst state income tax jurisdiction in all of baseball," Boras adds. "Players really get hit."
When it comes to California's taxes, "It's a red light" for prospective stars, agent John Boggs told the L.A. Times. "I've had players in the past say they don't want to go to certain states because they're going to get hammered by taxes. Obviously, that affects the bottom line."