The Oakland Raiders football team used the income tax savings to convince Derek Carr that he’s earning more from his salary in another city while the team pays out less.
In other words, the tax differences between California and Nevada brought down the total value of the deal. This enabled Carr to get more money up front than the team originally wanted to hand out.
What’s to blame or praise? Taxes. Different states, of course, have different tax rates. Some states such as Florida have no state income tax. This makes it a popular home state for athletes and entertainers looking to avoid the extra tax hit.
Looking To Save?
If you’re negotiating a major sports contract, or just your salary in another city as part of a relocation package: you might want to download the City Vs City cost of living calculator.
Your location can make a big difference when it comes to negotiating your compensation. Particularly because the basic math that was used to calculate David Carr’s income tax savings did not even account for the differences in cost of living or the other forms of taxes (property taxes and sales taxes in particular).
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Who knows? Your salary in another city might be more than you thought!