When the headlines broke: Lebron to the Lakers, LA fans could barely contain their excitement. Could their suffering finally be over? Will the King be able to deliver a championship to one of the NBAs most storied franchises? It’s possible, but it will come at a cost.
There’s a lot to like about LA and California. There’s warm weather, the glitz and glam of Hollywood, and of course a big payday for Lebron James. Signing with the Lakers seemed inevitable and alas, with a stroke of the pen it was so.
However, while everyone (except Cleveland) cheers the news of Lebron to the Lakers, the King may not so cheerful. At least, not when he sees his new tax bill. According to Forbes, Lebron’s move to LA could wind up costing him an extra $21 million in taxes.
The question comes down to whether or not he winds up paying California taxes. See, Lebron maintains a home in Ohio, where the highest tax bracket is 4.99%. In California? It’s 13.3%.
It all depends on whether California claims him as a resident. His people will likely do their best to keep that from happening. However, it may be difficult. He has a home in California already, will be spending a considerable amount of time there, and his kids will most certainly attend school in California.
California isn’t going to let a high-earner slip through their fingers if they can help it. Should they be able to, his move will cost him $5.2 million this year on salary and endorsement income, not to mention higher taxes on investment income.
This would end up being over $21 million in additional state income taxes over the life of the contract. – According to Forbes.
$21 million. Heck of a way to welcome Lebron to the Lakers.
Cost of Living
California is well-known as a high cost state. Of course, Lebron James is more than equipped to handle the added taxes if necessary. Not everyone else is so lucky. As people continue to struggle under California’s high cost of living; many are thinking about getting out.
That’s where City vs City can help. City vs City is a powerful cost of living calculator. Using real, local data City v City determines your cost of living expenses. You can then compare the costs in your current city with another city of your choosing and see how your expenses change.
Lebron James probably didn’t know about City vs City before he signed with LA. If he had, he might have reconsidered. As Los Angeles welcomes Lebron to the Lakers, the elusive championship might come with a high price tag for the King.