Anthony Davis has been all over the headlines recently with his new contract. It is the richest annual extension in NBA history, AD is set to earn an average of $62,000,000 a year as a salary. However, there are a few things to be taken into consideration. Despite signing this record-breaking deal, the Los Angeles Lakers will see a 61% cut in his salary thanks to taxes. As Andrew Petcash pointed out on Twitter, the tax cuts include Federal tax, California State tax, and the infamous Michael Jordan tax among others.
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Most NBA contracts describe a paycheck before tax deductions are taken into account. As such, many NBA superstars earn a lot less than what their contracts entail. And, in The Brow’s case, this is especially true. With what he will have to pay, his estimated take-home salary will be around $24,000,000, losing out on $38,000,000 thanks to taxes.
Anthony Davis will take home only $24,000,000 even after signing the richest annual extension
Recently, Anthony Davis made headlines as it was announced he had signed the richest annual extension in NBA history. Agreeing to a $186,000,000 three-year extension with the Lakers, he will earn $62,000,000 on paper. However, Andrew Petcash recently broke down Davis’ real take-home salary, and it sees him take a 61% cut.
Unfortunately for the 2020 NBA Champion, taxes are steep in Los Angeles. Not only will he have to pay federal tax, NBA escrow, California State tax, agent fees, and FICA/Medicare, but he also has to pay the infamous Michael Jordan tax. Officially called the Jock tax, it came into place as a form of revenge, after the Lakers fell to Jordan’s Bulls in the 1991 NBA Finals.
So, paying $22,900,000 in federal tax, $6,000,000 in NBA escrow, $4,100,000 in state tax, $1.8 million in agent fees, $1,400,000 in Medicare, and $1,800,000 in Jock Tax, Davis’ net income falls to $24,000,000 per year. A huge 61% cut that sees him pay $38,000,000 in taxes.
It certainly puts things in perspective with regard to what NBA superstars actually earn. After all, a 61% cut is no laughing matter. But, at the end of the day, $24,000,000 is still a lot of money.
Jaylen Brown will earn $500,000 more than AD despite earning less than him on paper
Anthony Davis isn’t the only player taking a hit thanks to the Michael Jordan tax. Boston Celtics star Jaylen Brown who has also signed a huge five-year extension is also taking a hit thanks to taxes. However, in comparison, he will earn $500,000 more than AD. While they both pay similar taxes, Brow will pay $1,400,000 less than Davis thanks to the lower Massachusetts state tax.
Paying $2,700,000 to the state of Massachusetts, Brown will earn $24,500,000 after taxes. Giving him the edge over The Brow when it comes to net income.
Either way, both men will be taking home boatloads of cash. But, it does make one wonder if NBA superstars pay attention to the teams they play for, especially with all the taxes in place.
