It Would Cost James Harden Millions in Taxes to Play in Brooklyn Over Houston

James Harden apparently wants out of Houston and would love nothing more than to reunite with former Thunder teammate Kevin Durant on the Brooklyn Nets. Whether it happens remains to be seen, but it’s interesting to discuss. Salaries in the NBA have ballooned to the point that this trade would involve millions in taxes, if it were to happen.

Harden is due to make $133 million over the next three years. Texas has no state income tax, but New York does. The marginal state income tax, after $1,077,050 in wages, is 8.82 percent in New York. As Robert Raiola and Michael McCann point out at Sportico, Harden would wind up paying $13.6 million more taxes in Brooklyn than Houston over three years.

There are a couple factors that make this not as dire as it might seem. First, Harden has a player option after two seasons and could choose to leave the Nets for a more tax-friendly destination at that time. Further, if Harden, Durant, and Kyrie Irving were to win a championship with the Nets, there are massive rewards.

It goes without saying that there are psychological benefits to winning championships in sports. There are also considerable financial rewards, as endorsers want to be associated with winners. That may or may not offset the extra taxes.

If you’re looking at it from a pure dollars and cents perspective, Harden would certainly be taking a gamble on himself if he succeeds in maneuvering his way from Houston to Brooklyn.