Last year, golf great Phil Mickelson complained about the 61% tax rate he was paying on his earnings until the tax lovers bullied him into apologizing. This year Peyton Manning probably won’t make the same mistake even though he could pay as much as 101.83% tax on his Super Bowl earnings thanks to the New Jersey jock tax.
Every state with a professional sports franchise, with the exception of Texas, Tennessee, Florida, Washington and the District of Columbia, imposes the jock tax.
The tax is based on the number of football-related days the players are in the state. California came up with it first as if you couldn’t have guessed that on your own. It began with Michael Jordan’s Chicago Bulls in 1991. Then Illinois imposed its own jock tax and called it “Michael Jordan’s Revenge.” Clever, huh?
When the Seahawks and Broncos play in NJ for the Super Bowl, their salaries, their bonuses, and even their rings will be taxed at a rate of 8.97% for each day they are in the state. There is a tax formula that counts days to the maximum benefit of the NJ tax collectors.
Players who are on the winning side receive a $92,000 bonus and the losers get $46,000. Peyton Manning faces the highest tax bill because he will earn $15 million plus next season and the formula takes that into account. If he wins, he would owe New Jersey $60,000 or 51.08% of his Super Bowl earnings. Based on the tax formula, his New Jersey income tax, should he lose, would be $46,989 on his $46,000, which amounts to a 101.83% tax on his actual Super Bowl earnings in the state and this does not even consider federal taxes.
He can escape the tax by retiring and not making his salary the next year.
Everyone who travels with the team is also taxed, no matter how minimal their job. Those are the people who really get hurt.
No government is entitled to take 51% or 101% of a person’s income. It’s theft. The government will use any ruse to tax – a jock tax or a sin tax or an inheritance tax – and at some point, they end up taxing you more than you’ve earned.
Why do we accept this? Are we being patriotic as Joe Biden wants us to believe? The government thieves will have your believe it’s your duty.
Read the story and all about the tax formula at Forbes who broke the story.