On July 8, 2010, Cleveland Cavaliers fans anxiously awaited the “Decision” of star NBA player LeBron James. In what turned out to be a made for television 75 minute spectacle of supreme narcissism, King LeBron pronounced to the masses that he would be taking his talents to South Beach. Fast forward to the present and once again LeBron must decide whether to stay with his current team or take his talents elsewhere as he recently opted out of his current deal with the Miami Heat. Call it the “Decision, Part II”. Personally, I think that the sequel in this saga will turn out much like the first installment. Why? As Cuba Gooding Jr. said in Jerry McGuire, “Show me the money.” Or, in this case, “Show me the money and uh….. let me keep my money,” or words to that effect. A recent article titled, A Taxing Decision for LeBron James (found at http://dailysignal.com/2014/07/03/taxing-decision-lebron-james/), breaks down how much more LeBron will pay in income taxes if he leaves the Heat and takes his talents to Hollywood to play for one of the local clubs such as the Clippers. It’s a lot. The bottom line here is that his bottom line drops by 13.3% because in the Golden State, the top marginal income tax rate is a whopping 13.3%. Florida does not have a state income tax at all.
Much to chagrin of the local sports fan here in Southern California, the hated Mark Cuban has more to offer LeBron than the Buss family or the future owner of the Clippers because his Dallas Mavericks have their home base in Texas. Like Florida, Texas does not have a state income tax. It is no wonder why many retirees move to places like Florida, Texas, Nevada, and other states that have no or low state income tax. Estate planning only makes sense if you have an estate left to plan. While most no longer have to worry about the estate tax due to the increased exemption, income tax will nevertheless dwindle the nest egg . Many times people will ask me what they can do to pay less in taxes. The answer: take your talents to South Beach.