Dwight Howard Aware That Houston Has Become More Attractive

he seems to be injury prone... so I guess we made that mistake already... deja vu .... and we are not learning

 

DMo>DHo
Beard>Superman

I rather keep Asik over Dwight, if only one has to stay. We are getting an All-Star who is the coach, team trainer, doctor, psychologist- frankly he speaks too much on his mind. Kobe recently said that he needs to play with urgency and play through pain. If Kobe can't preach to him, how can Harden?!?!?!? I rather surround the team with Harden than Dwight, an organization killer, a team killer and a coach killer. Give me the raw Dwight, not the current one.

 

Nice try, but you do realize that the 2.4 is a hypothetical to illustrate numbers, and I strictly indicated that the bird rights situation does not apply there, right? Precisely because it is under the MLE.

And the difference in raises mitigates the tax difference advantage, even if it doesn't equalize. And yes, players have in the past sought after the value of those extra bird right contracts. That's the reason bird rights have value. Look at Harden signing with the Rockets. The Bird Rights was a major reason Harden extended with Houston. Bird contracts, extra year and bird raises, are a factor. He would certainly look for that before looking for any perceived tax advantage.

Finally, as for your last point, NO players are confident that they will be healthy always, nor that their performance won't decline. That is why Bird Rights offer financial advantage contrary to your statement. They always look for security and career injury insurance. That's why they sometimes insist on things like player options. For instance, the last two JR Smith contracts both had player options, specifically as an injury insurance. And no players, if any, choose to take qualifying 1 yr offers, in order to get a larger contract next free agency (see Asik, Lin, Fields, etc.). Just as none of them usually pass on multi-yr max Bird contracts in favor of smaller non-bird deals. Players usually don't leave money on the table like that. And bird rights absolutely give teams an advantage. In fact, as you can see from the Melo/Nuggets scenario (fixed in the new CBA), they actively maneuver to preserve their bird rights and bird contracts (raises and years).

Besides, after you account for multi-state tax allocation (whether via duty days or the games played method) and apply the graduated tax brackets instead of flat taxes, the effective tax rate is well below 13%, so the advantage isn't as great as perceived. And the players in Texas are not going to be paying 0% tax, they still get taxed via the multi-state revenue allocation system. And that's not even considering the extra exposure and endorsement potential of being in a larger media market with a high tax rate versus a smaller media market with no tax (100% of nothing would still be nothing, though that's obviously an extreme and not the case here).

 

Know when to fold'em morey

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Let the Lakers keep him so they can have a Yao Ming situation for the next five years. If we meet in the playoffs we can have one of our players jump on his feet and maybe injure his back.

 

Here, let's take Dwight Howard as an example.

His current salary is $19,536,360.

At the first year of his new contract (whatever team he signs with and whether they have his bird rights or not), he can get up to 105% of his current salary. That means $20,513,178.00.

On a non-bird contract (max of up to 4 yrs), after 4.5% annual raises, he will be at $23,408,943.85 in his 4th year.

On a bird contract (max of up to 5yrs), after 7.5% annual raises, he will be at $25,483,456.93 in his 4th year, and $27,394,716.20 in his 5th bird year.

Let's simplify it and consider 50% of that income as being allocated to the home state. And then only tax the amount that is over $1M at 13%. This doesn't consider post season play that changes the duty days/games played calculations, or the couple of extra divisional games played in TX vs. Cali, depending on what state he signs with, or the graduated lower tier taxes on the amounts under a million, and it doesn't consider endorsements or other non-apportional salary elements like bonuses, but it gives a rough approximation.

Under that scenario, he pays $1,333,356.44 in Cali taxes the 1st year, and a $1,656,424.57 in taxes in Cali the 4th year. And that's not even considering the extra money from the 5th year, since there is no 5th year in TX.

The gross pay difference between the Cali Bird Rights and TX nonBird is $2,074,513.08 in the 4th year. That alone is more than the difference attributed to the Cali taxes in this scenario.

Even if there was any deficit, he would more than make up for it just with endorsement opportunities being next door to Hollywood.

So, you can see why the benefits of Texas's no State Tax over his Bird Rights in California are overstated. Any rational person would choose California.

 

I agree with @skyhoop in the rest of the thread. Regarding Tiger Woods I agree that a major reason for him moving to Florida was the tax code. However, he makes 90% of his income via adverstising. Dwight's income is reciprocal and would be taxed accordingly. Furthermore, Dwight could still claim his residence in Florida or Texas and play in Cali and avoid tax penalty on any advertising income while still playing in LA.

Regarding the MLE contract - unless DH's agent is a complete moron he's going to instruct DH to disregard anything about that contract so it's moot. This contract is all about maximizing his current situation. This is intensified by his injuries.

I dont disagree that Morey or any other GM would try to highlight everything including a lack of state tax that might land them a player, but it never works because the argument doesnt have a lot of merit. There is no way DH makes more per year in TX as opposed to LA.

 

asik can't hold howard's jock and that's not even a debate. maybe when he learns how to CATCH THE DAMN BALL only then you can make a case for him even being in d12's class. if howard was on this team getting all those easy looks asik gets he'll be averaging 20+ right now easy

 

I don't know if D12 gets any more or less endorsements playing for a crappy Lakers team or a Championship contending Rockets team. Having said that, even if he plays for the Rockets next season he will have to pay a state income tax for most of the road games since most states have made visiting players liable for State Income Tax. If the Rockets play 6 games in California next season then all of the Rockets players are liable for State Income Tax against the salary earned while playing those 6 games in California.

There are 31 games a year where Rockets players are subjected to the Jock Tax so there are 31 games a year that Rockets players have to pay state income tax to some state.

 

Although it would be nice, just not going to happen. It's like leaving your current hot supermodel trophy wife for a high school stalker that recently got a boob job...

 

Yes, that was my point regarding the multi-state tax allotment. I focused in the difference in tax calculations for home games (I'm using the rough 50% figure, even though duty-days/game-played calculations can change based on whether they make the playoffs), since they would need to pay similar taxes for the non-TX and non-Cali states regardless of which team they sign with, so I just considered that a wash (there are slight difference based on divisional composition, but those slight differences aren't too significant when considered against the whole).

 

Houston Has Become More Attractive?

 

Agreed. Just because Morey may want to push that angle in his sales pitch, doesn't mean free agents are stupid enough to fall for it. And even if they were, I'm sure they have agents and accountants that can work it out for them and show them the fallacy in Morey's no state tax argument.

 

whats the point of having a dominant center, and solid pf when they are always alienated and then take ALL of the blame for one guy shotjacking the team to l's

you are a kobetard buddy, blinding by Kobe's flashing moves which lead to bricks, wasted possesions trying to play hero ball every possesion, you notice when Kobe passes the ball more they WIN. Those earlier losses in the season were because Kobrick was going after a scoring title instead of putting the team first

Dwight is better than Asik, they both suck as shooters, with Dwight being more athletic and the better rebounder( he gets the nod in my book)

 

http://bbs.clutchfans.net/showthread.php?t=230401&highlight=income

There is a thread where we discussed the jock tax pretty extensively. Using Chris Paul as an example and and using only the Cali state tax for all 31 duty days (which would be the high end since not all states have as high of a state income tax) it looks like Paul would have earned roughly an additional 350K over a 4 year contract. While that is a lot of money, I don't think it's that much when you are making over 20 million a year.

 

Yes, except the benefit for Dwight Howard of staying in Cali is slightly greater than for Chris Paul due to the higher salary that Dwight Howard is allowed than CP3 in their next contracts.

 

Whether Houston has become more attractive to Howard or not doesn't change a thing. This situation has always been the same.

-Houston or another suitor must trade for Dwight before the February trade deadline to get him on a long term contract.

If not, I find it almost impossible that he would leave that extra guaranteed year and some exta $ on the table to leave as an unrestricted free agent. Remember, due to the Carmelo Anthony rule that was installed in the new CBA, super-max free agents in this case cannot be elligible for sign & trades. Also keep in mind that when Dwight hits free agency again the next go around, its very possible that there will be a new CBA in place after the current one that is less player friendly from a financial standpoint. NO WAY Dwight and his reps leave money on the table in free agency.

-However.... dont rule out a trade next year after Dwight signs his next contract with LA. Its very possible that once he gets locked up in his next contract, he and the Lakers move in a different direction upon the twighlight of Kobe, Nash, and Gasol's careers next year. Trading Dwight next year and completely rebuilding the Lakers from the ground floor on up might be in order next season, and they could use Dwight as a catalyst for a total rebuild to get assets in trade.

-So in short, if the Rockets or another team CANNOT trade for Dwight before the deadline in two weeks(which looks unlikely at this point), he's almost certainly going to re-sign in LA this Summer, and be in LA until the beginning of 2014. However, dont be surprised if after January 2014, Dwight trade rumours come flying back on the main stage with the Rockets on the forefront of the recieving end of Dwight.

 

Dwight is not what he once was. Do not want. Asik has years of improvement to look forward to. Would rather spend the money elsewhere.

 

You can't claim domicile in Florida or Texas while working in LA, that would be fraudulent. Jeter tried to do this when he bought a house down in Florida, and the courts made him pay up his portion of New York taxes. The courts generally look at where your company is located, and for Dwight that would LA. I think what skyhoop is saying is that being in LA, he will make more in endorsements than anywhere anyways, so he wouldn't care about extra taxes. This is a fair point. Chris Paul, who had already had Powerade, Jordan, and Speedstick deals, now has deals with Jeep and State Farm. I think more than anything, that is what LA can offer, non-basketball related endorsements.

Great players will still get their shoe contracts and sport related endorsements regardless of markets. Durant gets the third most in endorsement deals, only behind James and Bryant. However, you look at how many shoes they sell (70 million dollars worth for Lebron vs 7 million dollars worth for Durant) and you can see the difference in playing in a high profile market.

 

Dwight Howard is aware that anywhere is more attractive than the Lakers.