Nikola Jokic has been the biggest factor in the Denver Nuggets’ 2023 championship run. After being named the Most Valuable Player for the 2020-2021 and 2021-2022 seasons, the Joker has concluded the 2022-2023 campaign by lifting the Larry O’Brien championship trophy, as well as the Bill Russell Finals MVP award. Despite being considered the best player in the world, the Serbian’s $46,900,000 earnings this year will be taking a huge hit. As shocking as it sounds, Michael Jordan has played a hand in the 6-foot-11 big man losing out on a whopping $22,670,000.
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Back in the 2022 offseason, after his 2nd MVP season, the Nuggets rewarded Jokic with a staggering 5-year, $272 million contract extension. With the contract not even kicking in yet, Jokic has already managed to win a title for the city of Denver. However, despite being a 5-time All-Star, a back-to-back MVP, and now an NBA champion, Jokic is not exempted from the $22.6 million that he’s going to lose in taxes.
Nikola Jokic and the tale of taxes
After Michael Jordan and the Bulls won the 1991 NBA championship, California released the income tax assessments of all the players on the Chicago franchise. This would lead to the formulation of the “Michael Jordan” revenge tax. As per popular belief, the ‘jock tax’ was levied as a hit back at Jordan and the Bulls for defeating the Showtime Lakers in the NBA Finals.
Apart from paying $1.4 million as the Jock tax, the European superstar will end up with only $24.23 million(almost 50% of his contract) in net income after paying the federal tax, Colorado state tax, his agent, and the FICA.
Have a look at the tweet by Andrew Petcash, breaking down all the taxes that Jokic owes.
Nikola Jokic’s income after taxes
$46.9M: Salary
–
$17.36M: Federal Tax
$2.06M: Colorado Tax
$1.41M: Agent Fee
$1.4M: Jock Tax
$436k: FICA
=
$24.23M: Net Income pic.twitter.com/DqEQfoOZec— Andrew Petcash (@AndrewPetcash) June 5, 2023
The 28-year-old will be receiving more than $50 million per year until the end of the 2027-2028 season. Despite paying all these taxes, it is pretty safe to say that the Joker will not have to worry about his financial situation any time soon.
LeBron James is taxed 35% of his annual earnings
As of 2022, LeBron James is reported to earn as much as $200 million per year. Unfortunately, this is not the net amount that the Los Angeles Lakers superstar is able to take back home.
Taxed almost 35% of his annual earnings, the 4-time MVP pays the government $70,000,000 every year.
Billionaire owners pay far less in tax % than their millionaire players (and staff):
: 34.8% on $200m
‘ : 14.1% on $45,000
: 11.6% on $1 billion pic.twitter.com/MkB0tmG9u9
— Andrew Petcash (@AndrewPetcash) April 8, 2023
Amortization, a part of the United States tax code, allows sports team owners to write off the purchasing price of the team they own when it comes to their taxes. With the King wanting to buy an NBA franchise later in his life, he will not be needed to pay 35% of his annual salary in taxes.
