How Falling A Spot In The NBA Draft Will Actually Save Jalen Suggs Money

ByJoey Heldon July 29, 2021inArticles›Sports News

By most accounts, the 2021 NBA Draft had a consensus top-four order: Cade Cunningham, Jalen Green, Evan Mobley, and Jalen Suggs. The first three went as expected. The Detroit Pistons selected Cunningham, the Houston Rockets chose Green, and Mobley went to the Cavaliers with the third pick.

But then the Toronto Raptors were on the clock. And Raptors president Masai Ujiri is never one to shy away from mixing things up. Remember, this is the same guy that traded for Kawhi Leonard on a one-year rental that ultimately led to a championship.

Ujiri and the Raptors decided to go with Scottie Barnes out of Florida State. It may turn out to be a great pick, but it goes against what conventional wisdom seemed to suggest.

Suggs didn’t have to wait much longer to hear his name called. The Orlando Magic took him with the fifth overall pick. Despite the small slide, it’s going to end up saving Suggs money in the long run — and conversely, costing Barnes more than a million dollars.

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Arturo Holmes/Getty Images

Each player that gets drafted will sign on a rookie salary scale, making between 80% and 120% of the total value of each pick. Assuming both players sign for the 120%, Barnes will earn $33,064,628 and Suggs will make $29,956,217 over their first four seasons.

But that won’t be what they take home. There’s still the matter of taxes.

Barnes will owe $10,839,878 in Canadian federal tax, which has a progressive tax rate up to 33%. He’ll also owe an additional $4,376,386 in Ontario taxes, the province that Toronto is in. All told, Barnes will have most of his money taxed at a 46.16% rate for a total of $15,216,264.

Meanwhile, the majority of Suggs’ money will be taxed at 37%, the highest U.S. federal tax rate. Suggs will owe $11,048,227 to the U.S. government.

That’s all he’ll pay in taxes, though. Florida has no state income tax, so Suggs will owe about $4.2 million less in taxes than Barnes will.

As a result, despite having a smaller salary, Suggs will take home $1,059,626 more than Barnes during his rookie contract. If both players end up becoming stars and re-sign with their respective teams, those savings will be even greater.

It’s a dream come true to hear your name called on draft night. For Suggs, it was worth the extra wait.

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DeMar DeRozan Can Potentially Save $20 Million In Taxes Over The Next Three Years

ByJoey Heldon January 14, 2019inArticles›Sports News

DeMar DeRozan was the face of the Toronto Raptors for nearly a decade before being traded to the San Antonio Spurs this offseason. Though he lived in Toronto during the year, his main offseason residence was in his hometown of Compton, CA. He recently purchased a $15 million mansion in the Hidden Hills neighborhood.

But if DeRozan were to take up residence in the state of his new team, he could potentially save a ton of money.

DeRozan still has three years and $83 million left on his contract. In California, someone in his tax bracket would owe 13.30 percent of his income to state taxes. That’s a little more than $11 million for just his individual income, or about $3.7 million per year.

California also has one of the highest sales tax rates in the country. DeRozan is saving money by not buying things in-state.

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Sam Greenwood/Getty Images

Meanwhile, there’s no state income tax in Texas, so DeRozan could save millions simply by changing his address.

But wait, there’s more: professional athletes pay a “jock tax” for wherever they play games. Before being traded, half of DeRozan’s NBA paychecks were affected by Canadian tax. That’s 13.16 percent from Ontario taxes, the province in which Toronto is located.

In fact, for Canadian earners in the highest tax bracket, they pay 53 percent in taxes. That’s more than half their earnings!

DeRozan now avoids those Ontario taxes by being in a Spurs uniform.

All told, between Federal, Canadian, and state taxes, DeRozan stands to save about $20 million in taxes over the next three years if he lives in Texas instead of California.

While it’s unclear if he’ll actually make the move, it’s gotta be tempting. After all, it’s not every day you can save $20 million, right?

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