Tax differences in California and Nevada could complicate Khalil Mack deal

Getty Images

Raiders coach Jon Gruden and star pass rusher Khalil Mack still haven’t spoken since Gruden got the job, but on one issue they may have some common ground: They both recognize an opportunity to reduce their tax bill by structuring their contracts to pay them most of their money after the Raiders move to Las Vegas.

California has America’s highest income tax rate, at 13.3 percent. Nevada is one of the few states with no income tax. That’s surely part of the reason that Gruden’s contract is backloaded, to pay him more money once the Raiders are playing in Las Vegas than he’s getting over the next two years while they’re still playing in Oakland.

As noted by Michael Gehlken of the Las Vegas Review-Journal, the tax issue could complicate things between Mack and the Raiders. Mack may want to push more of his guaranteed money to the 2020 season, when the Raiders will be in Las Vegas, and the Raiders may not want to have huge guaranteed payouts on their books years in advance.

Mack may also figure that if he’s going to wait a couple years for his biggest payday, he doesn’t need to be in any hurry to get a deal done now: If the Raiders haven’t bowled him over with an offer that makes him the highest-paid defensive player in NFL history, mack might calculate that it makes more sense to hold off on signing any long-term deals until he’s in a position where he can either re-sign with a Nevada-based franchise, or shop himself to the highest bidder.

67 responses to “Tax differences in California and Nevada could complicate Khalil Mack deal

  1. Big Long-term deals don’t work anymore.
    Teams can’t be on the hook that far out and players seem to forget that they made deals after they cash their signing bonus.
    Guaranteed 1-2 year deals keep everyone honest…

  2. Once again, nothing to be seen (read) here. Mack will be a Raider this year, next year and the year after. At that point, he’ll be 30 and they’ll need to decide if they want to sign him to an extension, let him walk or listen to offers. He isn’t the first player to ever hold out. If he’s signed to an extension or not, he’ll report to the team prior to week 1 ready to roll.

  3. I see both sides here. I agree Mack is better maximizing his income by waiting fir the mobey until its taxed lower. But also I can see a team not liking that guaranteed money so far in the future. Great as Mack is, the level of guarantee he will be that great diminishes each year farther in the futre you look. Thats nothing to do with Mack thats whats going to hapeen.

    But I think the Raiders should take this one in this case because..

    1) worst case scenario is that they are a couple years from now paying for performance they got this year. The liklihood if them paying for performance they never got at any point is not changed.

    2) Just like Mack could posdibly be worth less a few years from now, its also just as possible ge fets better. The likelihood fir a few years out is simply that his level be kdifferent’ not worse. I would get it if this was an ag8ng pro but this guy is coming into prime. So maybe it maps out they get him cheap early on and at whats simply a fair value, not an overpay, later.

    3) backloaded contracts certainly hold less of that risk a guy will hold out wanting more if the market changes. Its not zero, but certainly way less risk.

    4) When any business completely relocates itself like that they have to accept something that significant will gave affect on the outlook of employyess, including key ones. Happy guys can become unhappy, unhappy guys can be come happy. All kinds if changes as they decide for themselves based on how it impacts their lives. Any company deviding such a move needs to factor into its thinking that there will be isdues from that and be prepared to be flexible as needed to deeal with them. If not flexible they have to accrpt the fallout if key employees make certain decisions.

  4. sc49ers says:
    August 1, 2018 at 10:43 am
    Let’s just say there broke and they over paid to many players

    ———

    If Carr doesn’t have a huge year this coming season then I have to believe that Gruden and company will have a massive case of buyers’ remorse.

  5. I’m surprised any players want to play in California with those insane income taxes…. but the athletes have to have 8 tax sheets for away games, for different tax guide lines….

  6. So why not in practice. If he wants to hold out fine but practice is now not in 2020. Most of these guys are being advised to skip practice to avoid injury.

  7. Players that play for California based teams should definitely look at after tax money when considering new contracts whether it is an extension or free agency. If the agents are not pointing this out then they should be sued for malpractice.

  8. This is yet another irresponsible story, just like the one that said Gruden and Mack haven’t talked when in fact they have.

    Carr’s deal is backend loaded because he’ll pay no State tax when they move, the same thing will happen with Mack.

  9. How much money do these players need. Just all about ego. Just getting ridiculous

    Mack will earn millions but they want to move more of it to the Vegas years ? He’ll earn a fortune and won’t ever spend it all in his lifetime. Just utter greed. Arguing whether he’ll get 21 mill or 18 mill etc. Crazy money

  10. joetoronto says:
    August 1, 2018 at 11:16 am
    This is yet another irresponsible story, just like the one that said Gruden and Mack haven’t talked when in fact they have.

    Carr’s deal is back loaded because he’ll pay no State tax when they move, the same thing will happen with Mack.
    ——————————————————————————————
    As usual, Joe is right. Everyone loves to pile on the Raiders when in all actuality this entire situation is nothing out of the ordinary. I’ll love reading the comments of everyone on this site and in the media when Mack is signed and all of this goes away. Just like last year with Penn.

  11. Cali…the highest income taxes in the U.S. The near highest gasoline taxes. The highest homelessness, the highest property costs, the highest auto registration fees, the lowest infrastructure maintenance, the near lowest education performance, the lowest rated quality of life. Player game checks take a beating.

  12. whenwilliteverend says:
    August 1, 2018 at 11:08 am

    13.3%. Wow. No wonder so many middle class families are leaving California.
    ———————————————-
    For what it’s worth, California has tax brackets, like the IRS does. 13.3% is the highest rate. Millionaires are paying that percentage, but most “middle class” families probably don’t have income high enough to be taxed at that rate.

  13. Its one thing if you are just getting started and trying to buy your first home, but I would rather have $87 million in the bay area of California than $100 million in Vegas. Temps in the 70’s year round is something money cannot buy. 100 degree temps get real old real fast. Casinos are fun for a weekend, but year round? If the market is willing to bear 5x the cost for an entry level home in the Bay Area than Vegas, that indicates there are some things people like about the bay area, the culture, food, beaches, weather, history, arts, etc. Moving guarantees backloading a contract can be gambling, but if I was a player I would not be thrilled with the move overall.

  14. whenwilliteverend says:
    August 1, 2018 at 11:08 am
    13.3%. Wow. No wonder so many middle class families are leaving California.

    ——————-
    If they want to pay the way for some people the rest need to chip in extra. Its something they voted in (or at least the people that set those taxes were) so in all fairness its people’s choice and their free call to make. And as with anything, those that dont like the deal (in this case the decisions by people that were voted into office) can vote with their feet.

  15. Anyone else ever noticed how high-tax states like New York and California are always seemingly broke, but states with no state income tax like Texas and Nevada are booming?

  16. Its not that complicated…he wants to be higher paid than Donald, and the Raiders are willing to pay him more than Donald. That can’t happen until Donald signs his contract. They are simply waiting for Donald to sign a contract and then he will sign one right after. Pure business decision from both sides. He knows and the Raiders know that he doesn’t need the training camps or preseason to be ready for the season…Neither side is panicking. And it isn’t being broadcast by either party because it would go against the rules of the CBA, but you have to be a fool to think a hard worker and perfectionist like Mack isn’t secretly getting tapes and defensive schemes and studying up on his own right now and doing his own personal workouts with an army of fitness trainers

  17. My business is based on tourists coming to California to surf.

    I’m ready to start doing something else.

    So please, with sugar on top, stay home.

    I’m 4th generation and California is the Greatest State in the Union.

    Everything else is based on preconceived notions and political bias.

    Be well, everyone.

  18. whenwilliteverend says:
    August 1, 2018 at 11:08 am

    13.3%. Wow. No wonder so many middle class families are leaving California.

    ————————————————————————————-

    That is the highest tax rate for individuals making $1 million or more so unless that’s your definition of middle class you are misinformed.

  19. Coffeehog says:
    August 1, 2018 at 11:29 am
    whenwilliteverend says:
    August 1, 2018 at 11:08 am
    13.3%. Wow. No wonder so many middle class families are leaving California.

    ——————-
    If they want to pay the way for some people the rest need to chip in extra. Its something they voted in (or at least the people that set those taxes were) so in all fairness its people’s choice and their free call to make. And as with anything, those that dont like the deal (in this case the decisions by people that were voted into office) can vote with their feet.

    ———

    So when a majority of people who pay little to zero taxes vote for those who agree to heavily tax the minority and distribute the proceeds to the majority that is ok? It sounds like extortion to me.

    Thankfully we have zero income tax here in NH. And we plan to keep it that way.

  20. All is NOT well in California. People are leaving in droves and the State is so broke they’re now freeing prisoners.

    Keep your head in the sand though, it’s much nicer there.

  21. “and the Raiders may not want to have huge guaranteed payouts on their books years in advance.”
    _____________________

    Why would that be any issue for them? You just published an article yesterday on how the Sam Darnold situation was rare for him to get so much guaranteed money at the very start because the norm is to spread guarantees over several years. And it’d actually be cheaper for the Raiders to pay money further down the road because of inflation.

  22. But who is going to pay for the Sanctuaries then? blah. CA = Highest taxes yet the gov’t keeps going bankrupt. What does that tell you about the socialism of money?

  23. How many times does Jon Gruden’s quote about calling Mack after he got the Raiders job back in January have to be repeated before people stop parroting the “Gruden and Mack STILL haven’t spoken…” canard?!?

  24. Yea taxes are incredibly high but, while Californian’s are moving out by the day. Study’s show more out of staters and people from all around the world are moving in then people moving out by the day. California is the fifth largest money making economy in the WORLD!!! Ahead of all the other US 49 states COMBINED!!!! California alone is ranked 5th. While the rest of the United States combined is ranked 6th or 7th globally.

  25. it appears that many make blanket assumptions that just aren’t true. California, like many states, has a progressive tax structure, meaning that as the income rises, the tax rate goes.

    Examples:

    Kentucky – all filers income between $8,000 and $75,000 is taxed at 5.8%, it goes up after that

    Wisconsin – income between $14,980 and $29,960 (married filing jointly) is taxed at 5.84%, it goes up after that

    Missouri – all filers, after $9,000 are taxed at 6%

    South Carolina – all filers between $11,720 and $14,650 the rate is 6% and all income above $14,650 the rate is 7%

    California – (married filing jointly) income between:
    $0 to $16,000 taxed at 1%
    $16,000 – $38,000 taxed at 2%
    $38,000 – $60,000 taxed at 4%
    $60,000 – $83,000 taxed at 6%

    it keeps going up after that, with 5 more tax brackets.

    I’m not arguing that California’s tax burden, as a whole, is less than other places, but blanket statements that say, or imply, that everyone pays 13.3% are false.

  26. Apparently my rhetoric on CA stealing from some & giving too others is too much for the mods on this board!

    Yeah, CA has no problems. Homeless aren’t flocking there in droves. There aren’t piles of needles a few blocks away from a $350+ per average non-holiday night in the middle of the week in San Francisco. People don’t live in their cars there!

  27. mullman76 says:

    I’m 4th generation and California is the Greatest State in the Union.
    ===================================================

    I’m from Dallas/Ft Worth and I know as many people who moved from Cali as I do native Texans.

  28. nhpats says:
    August 1, 2018 at 11:53 am
    Coffeehog says:
    August 1, 2018 at 11:29 am
    whenwilliteverend says:
    August 1, 2018 at 11:08 am
    13.3%. Wow. No wonder so many middle class families are leaving California.

    ——————-
    If they want to pay the way for some people the rest need to chip in extra. Its something they voted in (or at least the people that set those taxes were) so in all fairness its people’s choice and their free call to make. And as with anything, those that dont like the deal (in this case the decisions by people that were voted into office) can vote with their feet.

    ———

    So when a majority of people who pay little to zero taxes vote for those who agree to heavily tax the minority and distribute the proceeds to the majority that is ok? It sounds like extortion to me.

    Thankfully we have zero income tax here in NH. And we plan to keep it that way.

    ——————
    Im not commenting rightly or wrongly about the choices of any state. I was simply saying its the right of the people in any given state to choose, and also anyones lot to live with those choices afterward if they want to be there.

  29. murphyslaw40 says:
    August 1, 2018 at 11:36 am
    Anyone else ever noticed how high-tax states like New York and California are always seemingly broke, but states with no state income tax like Texas and Nevada are booming?

    ————–

    Huh? What the heck are you watching? California has a surplus under Gov. Brown. It’s now the 5th biggest economy in the world. California also contributes more the U.S. economy more than any other state. The state is firmly in the 21st Century and leading the way as usual.

  30. joetoronto says:
    August 1, 2018 at 11:57 am
    All is NOT well in California. People are leaving in droves and the State is so broke they’re now freeing prisoners.

    Keep your head in the sand though, it’s much nicer there.

    ————————————————————————–

    ???????????????????

    Broke as in moving up from 6th largest to 5th largest economy in the WORLD?

    The only people leaving are the ones who can’t afford to live here and for every business that moves we gain 2 more, so have fun with your InfoWars talking points because the only one with their head buried in the sand is you.

    Oh and speaking of taxes I hear Canada’s is very low *sarc*

  31. 48 billion in debt. Not good Sanctuary State. What till the next governor takes over, he makes Moonbeam look like a fiscal conservative.

  32. There aren’t piles of needles a few blocks away from a $350+ per average non-holiday night in the middle of the week in San Francisco. People don’t live in their cars there!

    —–

    and you think that is the only place with a needle problem?

    here in NH people were finding needles in the sand, at the beach. the problem is just about everywhere.

  33. I lived in California for 32 years (most of my life) and I moved away because I would never be able to buy a decent home at a good price. I moved north (with zero income tax, and many other bonus that are way better than CA).
    The longer I am away from CA, the more I wondered why I loved it so much? In reality, it’s just an over populated and over priced hot spot, with garbage polices and politics. Unless you live at the beach, get out.

  34. nhpats said:Thankfully we have zero income tax here in NH. And we plan to keep it that way.

    NH makes up for it by having very high property taxes. So high it makes it difficult for seniors to stay in their homes. Instead of paying income tax until you retire, you pay high property taxes your entire home ownership life. Not good.

  35. 2020 in Las Vegas….I guess the construction crew better start working 24/7 then. Personally my humble opinion is it has nothing to do with Donald, but has everything to do with Von Miller contracts. Broncos really messed that one up…not only is he the highest paid defensive player in the nfl, but he ballons to over 25million per next season

  36. 345snarkavenue says:
    August 1, 2018 at 12:23 pm

    it keeps going up after that, with 5 more tax brackets.

    ***************************************************************************
    Gee, I wonder why you decided to not list those other 5 brackets?

    Maybe its because it contains a huge swath of middle class & above earners in the married filing jointly in the $105,224.00 to $537,000 in the 9.3% range (plus $4,632).

  37. vikings1234 says:
    August 1, 2018 at 1:43 pm
    nhpats said:Thankfully we have zero income tax here in NH. And we plan to keep it that way.

    NH makes up for it by having very high property taxes. So high it makes it difficult for seniors to stay in their homes. Instead of paying income tax until you retire, you pay high property taxes your entire home ownership life. Not good.

    —————-

    The property taxes are high, but nowhere near 5%+ of my income….not even close. And truth be told, since property values are less relative to Ma, they are actually about the same thing for the same home.

    The difference between what I would have paid in state taxes at 5% and instead invested over 20 years will more than pay for my property taxes during retirement and then some

  38. 345snarkavenue says:
    August 1, 2018 at 12:53 pm
    There aren’t piles of needles a few blocks away from a $350+ per average non-holiday night in the middle of the week in San Francisco. People don’t live in their cars there!

    —–

    and you think that is the only place with a needle problem?

    here in NH people were finding needles in the sand, at the beach. the problem is just about everywhere.

    ————
    They found one needle at Hampton Beaxh last year….. that’s a far cry fro what is going on in SF today. I was there about a month ago and it was disgusting.

  39. anarchopurplism says:
    Yeah, CA has no problems.
    ———————
    You’re right. Our freeways are overcrowded. It’s crazy everywhere out here – especially So Cali. Never consider moving here – never ever think about it. Stay in the midwest or where ever it is that you live. You live in paradise. You are so lucky. Don’t come here.

  40. Also – Gruden’s contract is backloaded in case he’s a disaster and needs to be terminated early. It’s the same as the player contracts where they are guaranteed huge money their final year. They rarely collect that giant sum.

  41. The traffic sure doesn’t support your all arguments that “no wonder everyone is leaving CA.” I wish I owned one of those 2 BR LA county bungalows that are going for $750K. How much are they in Vegas? $75K?

  42. Why would a team be bothered with delaying paying money for a year or two? They will need to put the entire guaranteed amount into escrow immidiately regardless of when it is paid, so this will literally not affect the raiders in any way.

  43. Lifelong Californian that will NEVER leave speaking here. We west coasters are all aware of the people leaving the state. The one’s I know were either 1) right wing nuts or 2) penny-pinchers that didn’t WANT to afford living here.

    The Great State of California is doing just fine. Economy is roaring, and NEWSFLASH we have a budget surplus.

    And to think how well we would be doing if we didn’t have to carry 7 southern red “fiscally responsible” states on our back as far as your Federal budget goes. If it weren’t for California, you’d all be so screwed.

  44. They found one needle at Hampton Beaxh last year….. that’s a far cry fro what is going on in SF today. I was there about a month ago and it was disgusting.

    ——-

    one was found at Hampton Beach last year when it stuck into the heel of a young girl, and then was all over the news. However there were others found before that and after that, that did not get the same news coverage. And they have been found at Rye Beach too.

    I never implied that the problem is worse here, what I said was that the problem is just about everywhere.

  45. Gee, I wonder why you decided to not list those other 5 brackets?

    ———–

    I didn’t need to in order to validate the point I was making, although 4 of 5 of those brackets would also validate my point.

  46. fearsome4 says:
    August 1, 2018 at 10:11 pm
    Lifelong Californian that will NEVER leave speaking here. We west coasters are all aware of the people leaving the state. The one’s I know were either 1) right wing nuts or 2) penny-pinchers that didn’t WANT to afford living here.

    The Great State of California is doing just fine. Economy is roaring, and NEWSFLASH we have a budget surplus.

    And to think how well we would be doing if we didn’t have to carry 7 southern red “fiscally responsible” states on our back as far as your Federal budget goes. If it weren’t for California, you’d all be so screwed.
    ———————————————

    By the looks of the streets of California’s major cities I would say you are screwed.

  47. Two different things being stated in this feed is that Cali is heavily in debt (1.52 trillion according to Forbes) and that Cali actually has a surplus I think I read 19 billion. Which is true? Actually both. A surplus is money left over after a given defined period. Debt is simply what you owe at a given moment whether its due now or over time. If I defer payments on a couple things I can finish the month with a surplus, but I still owe those deferred payments, plus lets say a student loan, a car loan, some crefit card debt, and a mortgage. So that surplus is nice but it does not mean Im not heavily in dept. so my next choice is do I sock that surplus away for a time when my cash flow is struggling and I get hit with an expense (for example so I am covered if that car needs a no notice expensive repair) or do I pay down some debt, or do I buy a new ATV? No matter what I do I will still owe that money either now or later, I hope this helps a few understand the difference between surplus and debt.

  48. I can see the Pacific Ocean from my bedroom, living room, kitchen, front yard and backyard.

    Commute to the sand: 5 minutes, with traffic.

    LTD = Living The Dream.

Leave a Reply

You must be logged in to leave a comment. Not a member? Register now!