And I believe this is how the legislation started. Taxing artists that were being paid by someone in the state to perform in that state but claiming the income in their state of residency.
I don't think this is right. First of all, no matter how much you pay a player, eventually their desire to test themselves at a higher level will win out and Europe will always be able to offer more from a salary standpoint. EJ has made no secret of his desire to go to Europe eventually. He has tempered that desire with the knowledge that he isn't quit ready yet, but if he performs well in WC06 I think that thought will leave his mind immediately. MLS knows this, and the only way they could get him and, more importantly, his agent to agree to a longer deal was to "splash the cash". People thought it would take at least a doubling or tripling of his $84k deal to get an extension....I always thought his agent would have to be an idiot to agree to that. Looks like his agent isn't an idiot at all. I'm impressed with MLS for increasing his salary ten fold. Oh yeah, and for those saying that this includes endorsements....I'm not so sure about that. Landon's income was reported earlier to be much, much higher than the article states. I would imagine THAT number included endorsements and this doesn't.
I think the 2nd reason is the most important. Transfer fees don't mean much when your teams are still struggling.
The problem with it is that the cap is not straightforward. As you may recall, I campaigned for a $3.5-$4M cap where all the salaries - or the top 7 salaries - would count. But these large single salaries subvert the system because they are easier to manage under the cap than the situation with DCU, for example, which may have several decent players, each worth $300-400K. Then you'd end up breaking up those teams. Then you also build resentments where a Davy Arnaud or a Pat Noonan may be at the top of his team in scoring but making a minute portion of what his teammate makes. Now, Dallas is already having trouble with Carlos Ruiz because it had played hardball with regard to his salary thoughout but now has given Eddie a lot more money despite Carlos still having better stats. This system is extremely convoluted and will not prevent MLS from ceasing to be a "feeder league". Considering that Holland, Belgium and even France have historically been feeder leagues with $15-30M team payrolls, what chance does MLS have of not being one with their financial structure? It only avoided being a true feeder because the Euros (wrongly) did not value the US talent much in the past but, as it is all changing, you will find more and more MLS stars finding excellent deals overseas. I'd rather MLS paid them upfront and took transfer money to have a reasonably structured leagues instead of having a set-up filled with a few haves and mostly have-nots. Or it risks a chance of becoming another NASL, except instead of vastly uneven team payrolls, they'd have vastly uneven players' salaries. Neither is a winning strategy.
I been wondering about this as well especially since it seems like Chivas USA might start bring in some Mexican national players and others from Chivas down south. These guys are definately going to want more than MLS guys are making due on? Does anyone know how these players are going to make it under the salary cap? I really like the fact that EJ is getting paid he deserves it. He's got great potential and MLS is taking care of their investment.
Actually, he's only partially right. Different states and municipalities have written their local tax codes to specifically target professional athletes. Not all cities have an income tax, so there are cities (Atlanta, for example) that do not have such a provision in the tax code. I think San Francisco was the first city to do this, several years ago. I want to say Philly was the second, but I have consumed gallons of whiskey since then sooooooo. But, the way it worked was if a baseball player played 12 games a season in SF, then they considered 12/162 of the salary to have been earned in SF and they wrote the tax code to get that money. This all began about the time that the players salaries got astronomical.
Unfortunately Landon has shown us that apparently not all players want to test themselves at a higher level. However, I do believe that EJ does in fact want to go abroad when the time is right.
State income tax generally is. I should know, I work in DC and live in Maryland. I pay Maryland taxes. Yes, I can see a special, separate tax for that. But it's not the rule, and it certainly is not the case that EJ will have to pay tax on half his earnings because they occurred outside TX. Those are just business trips. He lives and works in TX.
In a somewhat related note, I just wanted to add that Eddie Johnson is featured in the Italian weekly sports magazine, Guerin Sportivo. The article is a pretty impressive two-page spread. It doesn't give any info that US fans don't already know, but I was surprised to see it nonetheless.
So what happens is New York says "You live here so we are going to tax all your income."? Do you pay taxes on the same earnings twice?
If EJ went to France, England or Germany and took home $875,000 that would mean his salary was about $1.5million. So even if McHead makes that much at Fulham or Reyna does at ManCity, EJ can bring more money back to the crib. Granted he has to pay the Federal Income tax but it doesn't even approach the percentages he'd pay living in Europe. God Bless the USA!!!
How do I put this? OK, you are wrong. There are states and local jurisdictions that specifically target athletes and entertainers who play/perform in their jurisdictions. These are NOT considered business trips and untaxable to the states/local jurisdictions. The taxes that athlete pay to other states can be used as a credit to their home state (unless you live in a state with no income taxes). In theory, states could try to go after income earned on business trips, but it would be almost impossible to enforce so nobody tries. It is not very hard to check the box scores to see if an athlete participated in a game in your area. Professional athletes often wind up filing tax returns with several states in the same year. The reason that you pay no income taxes to DC is because DC is prohibited from taxing your income. States often have reciprocity agreements with neighboring states to not tax each others residents.
State taxes can vary by state. While living in South Carolina, I've had to pay North Carolina and Connecticut state income taxes because I worked on extensive trips to those states (i.e +8 weeks). Rules will be different for every state.
Obviously I was missing something. I was aiming at a response of "you think you're gonna charge me state income tax? Why don't you just come over here to my home state and try to collect it?" I bet that could be consitutionally challenged as a violation of the Interstate Commmerce clause.