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Back at it after a nice Thanksgiving and subsequent weekend. The Winter Meetings are one week away, and the non-tender deadline is Friday.

  • As we talk about free agency, and the value of contract offers, it’s always worth keeping the differing taxes among states in mind. Although the sales taxes in Illinois are hefty, the 3% income tax is relatively low. The Cubs are frequently competing for free agents with larget market teams in California or New York (well, they will be competing with them eventually), and the state income taxes there, at the highest levels, are 10.3% and 8.82%, respectively. According to an analysis by a tax lawyer on agent Scott Boras’s staff – yeah, they’re always evaluating these things – a player with a $10 million salary could see a different in aftertax income of as much as $400,000 in a no-tax state like Florida, versus a high-tax state like California.* Illinois is obviously closer to the no-tax end of the spectrum, and that $400,000 could be a huge difference: with upwards of $4 million in taxes coming out of that $10 million contract, that $400,000 is 6.67% of that player’s aftertax income. So, if I’m spitballin’ here, in Illinois that difference is obviously smaller – maybe $250,000 to $300,000 – but it’s still a big advantage that the Cubs have over, say, the Yankees or the Dodgers. The Cubs’ offer for the “same” money as those teams will always be about 5% better.
  • Matt Garza turns 29 today, and, since we’re friends now, I can wish Matt a happy birthday.
  • The MLBullets at BCB look at a variety of things, including an analysis on the utility of K/BB as a stat, instead of K% and BB%. The conclusions are relatively convincing that the latter are better than the former, but not to the point where it’s worth throwing out K/BB in total. But if you start seeing me use K% and BB% for pitchers a bit more around here, this is probably why.
  • The MLB.com shop is doing the Cyber Monday thing, so there might be a Cubs deal or two in there.
  • Over on the Message Board, BN’er Mike discusses the reasons the Cubs should be entertaining offers for Darwin Barney right now.
  • BN’er Brit Wagner is doing something pretty incredible: donating a kidney to a total stranger because it’s an awesome thing to do. You’ll be able to follow the journey here, which maybe will inspire you to do something for someone else (it doesn’t even have to be, like, giving a physical part of your body – it can be as simple as being nice to a checkout clerk who looks like she’s had a terrible day), and help with the costs associated with the donation process, if it comes to that.
  • * – State tax calculations are actually super complicated for folks who earn their income in a variety of states, as baseball players do (that is to say, you pay state income taxes where that income is earned – since baseball players play half their games at home and half in a variety of other states, there’s a lot of apportioning that goes on). But, I reckon that Boras’s tax man took that into account in his calculations, so I’ve left that issue untouched in my back-of-the-napkin’ing.
  • Mike

    I’m not an expert, but I always thought a person would pay income taxes in the state they resided not necessarily where they were working. For instance when I was in the military I did not have to pay Illinois income tax, yet others would depending on the state of their home residence.

    • Kyle

      Military must have special treatment. My wife lives in Missouri but works in Illinois and has to pay Illinois taxes.

      IIRC, professional athletes actually have to do complicated calculations whereby they pay half their income tax in their home states and half for where the various road games are played.

      • http://www.bleachernation.com Brett

        You are correct (but I ignored that half, since it equals out for everyone, and the tax guy on Boras’ staff presumably accounted for it). I’ll add a note.

    • Brian

      I remember hearing that the players(basketball) are taxed by game per state played in, so don’t know if same holds true for baseball and other sports.

  • Rizzo 44

    Sounds to me like the Cubs should be signing FA’s that are in the upper class because players can see they will make more money plus its a very large market. The top players will make extra money with endorsments in Chicago as well maybe not as much as New York or LA but still lots to be made. Just ask Soriano.

  • Coldneck

    That’s a military thing, Mike. Professional athletes pay taxes in each state they play a game. So, the typical baseball player will file about 17-18 state tax returns.

  • RoughRiider

    MLB.com would be the absolute last place I would shop for anything at any price. A couple of years ago I placed an order that was confirmed and later they came back and said that they couldn’t fill the order because they had run out. I can understand that happening and thought nothing of it until I saw the same item for sale a few days later for a much higher price. The item was an autographed picture of Ron Santo and it was after his untimely demise. I’m really not someone that ever collected autographs but growing up Ron Santo was my favorite player. I’m not sure how they came up with more of something like that after he was gone. They really didn’t want to fill the order because they believed they could get a lot more money.

  • Myles

    Did anyone else see the extension Longoria just got?

    I wish we had a bunch of Evan Longorias.

  • Alex

    I think since the state raised taxes a couple of years ago, our state taxes are now at 5%. If I remember correctly, it will go down to 3.75% in the next couple of years.

  • Pat

    Illinois state income tax was raised to 4.5 percent a couple of years ago when Quinn was elected. However, the basic point stands. And at those levels of income, 5% less in taxes comes close to 10% more take home pay.

  • Rob K

    Good points but the Illinois Income tax rate went up to 5% effective 1/1/2011 so we’re not near as low as we used to be….

  • CubFan Paul

    you should do your own write up on K% and BB%. its a bit different, but better. i’m still getting used to it

  • MightyBear

    Illinois is probably going up again and compared to New York or California, Illinois is low. Compared to everyone else they’re much higher. Illinois also has some of the highest ancillary taxes in the nation (ie property tax, hotel tax, sales tax, gasoline tax and on and on).

    Every state income tax is different. Texas and Florida have no state income tax. Most states do apportionment however states like Mississippi tax you on all your income no matter where you earn it as long as you’re a Mississippi resident.

  • Njriv

    I wonder what this Longoria extension means for David Price.

  • http://www.taxupdateblog.com Joe Kristan

    Illinois has a higher “effective” rate than 5% would indicate, because it is based on “adjusted gross income” — taxable income before itemized deductions. That means no there is no Illinois benefit for charitable deductions, property taxes and mortgage interest. Still better than California and New York, but much worse than Texas or Florida (0%). The Astros could tell you that taxes aren’t everything, but the Rangers would say that low taxes don’t hurt.

  • A.J.

    When I’ve worked in Illinois (I live on the Iowa side of the Quad Cities), I’ve always had to fill out Iowa tax forms. I don’t know if this is something that we do here because we’re connected cities (minus the Mississippi), but that’s what I was instructed to do by the employer. I’ve also worked for an Iowa company that did most of it’s business in Illinois, and I still filed Iowa taxes.

    • http://www.bleachernation.com Luke

      Some states have reciprocity agreements under which the states themselves agree to figure out how many your dollars go where and handle it on their end, rather you having to fill out multiple forms.

      Illinois does not have many of those deals left, if I remember right.

      • http://www.bleachernation.com Brett

        It usually happens in large cities on the border of a state, I believe (i.e., you live in Kentucky, but work in Cincinnati – they’ll let you pay Kentucky taxes, IIRC).

      • Spriggs

        Illinois has reciprocity agreements with Iowa, Wisconsin, Kentucky and (not sure why) Michigan. I know they used to have one with Indiana a few years back, but no longer.

        The income tax rate is now indeed 5% – which will not being going down anytime soon. And as @Joe Kristan correctly observed that is understated due to it being based on AGI (no itemized deductions for you!)… but NY is the same.

        And as @Mighty Bear correctly stated, these rates are in addition to some of the highest ancillary taxes in the nation (on average) such as property, gas, sales and sin taxes.

        Tax wise, Illinois is way on the expensive side. There are not many others besides NY and CA who are noticeably higher.

        • baldtaxguy

          Word ^^^

          With Mr. Quinn’s permanent “temporary income tax increase,” Illinois is in the tippy tops of tax expensive states. And in return we get world class corruption, and a state pension plan that is $96b underfunded (that’s billions) – that 5% tax rate will be climbing.

  • Stinky Pete

    Not sure where this would go so I’m putting it here. Just heard they hired Rob Deer as Asst. to the Regional Hitting Coach.
    Without looking him up, my recollection of Deer is a very unpatient hitter who was one of the trendsetters in today’s high strikeout totals. I also recall he broke a bat not over his knee or helmet, but his shoulder. On his backswing.

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