Do National Basketball Association Players Need Higher Salaries to Play in High Tax States? Evidence from Free Agents

Candon Johnson and Joshua Hall
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Candon Johnson: West Virginia University, Department of Economics

No 17-11, Working Papers from Department of Economics, West Virginia University

Abstract: This paper investigates the impact of taxes on the salaries received by National Basketball Association free agents from 2010-2014. High state income tax rates affect the after-tax income received by players from their team as well as on any ancillary income. Using data on 576 free agents, we find statistically significant evidence that free agents signing in high tax states receive higher salaries, ceteris paribus. Our results suggest that a one-unit increase in the average tax rate experienced by a free agent in a state leads to free agent salaries being over $60,000 higher.

Keywords: Tiebout; taxation; National Basketball Association (search for similar items in EconPapers)
JEL-codes: H20 H24 H71 (search for similar items in EconPapers)
Pages: 9 pages
Date: 2017-07
New Economics Papers: this item is included in nep-pbe and nep-spo
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Journal Article: Do National Basketball Association players need higher salaries to play in high tax states? Evidence from free agents (2018)
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