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How State Taxes Could Affect Where Bryce Harper and Manny Machado End Up

No matter where they sign as free agents, Bryce Harper and Manny Machado will break the bank. They could sign contracts that guarantee them more than $300 million, perhaps more than $400 million. Their deals will all but ensure that they and generations of descendants are financially set. Yet these two superstars will “take home” significantly higher or lower pay depending on which teams sign them and the applicable income tax rates in the states where those teams are based. This impact could be worth tens of millions of dollars. It is also heightened by a new federal law—the Tax Cuts and Jobs Act of 2017—which substantially limits the ability of taxpayers who itemize their deductions to deduct the dollars they spend paying state and local taxes on their federal income tax returns.