An unusual aspect of the N.H.L.’s two outdoor games at Yankee Stadium is that the Rangers have been designated the road team for both games, even though their opponents, the Devils and the Islanders, come from outside New York City.
The reason seems to lie in the special exemption that has freed Madison Square Garden from paying property taxes since 1982.
A provision of that 1982 agreement stipulates that if the Rangers or the Knicks play a home game outside the Garden, the exemption is forfeited. … Read More
“Tax Avoidance: How Income Tax Rates Affect the Labor Migration Decisions of NBA Free Agents” (Journal of Sports Economics, 2011)
As often as we hear about NBA players and other professional athletes going bankrupt, it turns out they are not as financially unintelligent as some suspect. It turns out that surreptitiously, players take state income tax rates into account when deciding where to sign as free agents. As much as we talk about chasing rings, getting max contracts, positional fit, chemistry with coaches, big market versus small market endorsement deals, and weather, it appears there are other rational factors at play in these decisions. Economist Nolan Kopkin looked at NBA free agency from 2001 to 2008 and found that even after accounting for a host of relevant factors such as team wins, player position, or crime rate and student-teacher ratio in a particular city, increases in income tax rates during this time period equaled lower-quality free agents. This data helps explain ”The Decision.“ LeBron James’ selection of the Heat allowed him to purchase $12.34 million worth of purple gingham shirts by relocating to tax-free Miami versus the tax load that would have resulted in New York. Whether agents, players, or some other invisible hand is responsible for this remarkable effect of income tax on free agency is unknown, but perhaps we should take this information into account when formulating our opinions on next summer’s signing period.
While notable, I’m not convinced the “effect of income tax on free agency” is truly “remarkable,” although readers can decide whether I am remarking upon it or simply noting it, and whether that changes the remarkability of the effect. Maybe “unsurprising” is what I’m getting at, particularly when one considers the interests, knowledge, and skill set of agents. Or at least, the contrary result would have been surprising, noteworthy, and very possibly remarkable.
The rest of this edition of what appears to be a regular sports science feature is here.
Not to be confused with the movie of the same title, Life is the 2010 autobiography of guitarist and Rolling Stones co-founder Keith Richards. Finally catching up my reviews to some reasonable proximity to the subject book’s publication date, cf. here and here, I started reading Life about five weeks ago as an enjoyable distraction from the legal matters that had been commanding my time. How surprised was I, then, to read the opening lines of Ric … Read More