The reason is that California has the nation’s highest state personal income tax rate, topping out at 13.3 percent, the Los Angeles Times reported Thursday.
Pennsylvania, on the hand, has a low flat rate of 3.07 percent, according to the newspaper.
In the largest free-agent deal in the history of North American sports, Harper signed a 13-year, $330-million contract last week with the Phillies, declining the Dodgers and Giants.
“With a contract of that magnitude, it’s dramatic,” Scott Boras, Harper’s agent, said of the taxes, according to the Los Angeles Times. “It could be almost a full year’s compensation.”
The Giants reportedly offered 12 years and $312 million, but were told they would need to up the ante to compensate for California’s tax hit. The Dodgers reportedly offered fewer years, but higher annual salaries.
“The Giants, Dodgers and Padres are in the worst state income tax jurisdiction in all of baseball,” Boras told the paper. “Players really get hit.”
By Amy Lieu