The Jock Tax Index Will Help You Understand Professional Sports

Your favorite player didn’t leave your team because he doesn’t like you. He just hates your tax rate.

When a player is deciding where to sign with in his hard-won free agency, they take a lot into consideration: their family, the prospective rosters, the offer they’re receiving, and the ever-important JTI. Never heard of the Jock Tax Index? Don’t worry – it’s just what determines whether you can attract big stars to your favorite club or whether your state has chosen to have nice public schools instead. 

This week at the MIT Sloan Sports Analytics Conference (think Burning Man but for sports analytics geeks), Alan F. Pogroszewski, a professor at St. John Fisher College in western New York, is presenting a paper on the MLB Jock Tax Index. As Pogroszewski explains, the JTI is a tool for evaluating the tax burden each player will have to pay when they sign with a team. For example, playing in a state like Florida, which has no income tax, is a lot more attractive than playing in California, which has one of the highest JTIs in the nation.

For a team like the Angels to make an equal offer to a player as the Tampa Bay Rays, they would have to offer substantially more. As the graph below demonstrates, a player who signs with the Rays would keep as much as 57 percent of their pay check after taxes, but a player signing with the Giants would only get 50% of that massive payday.

All of a sudden the huge amounts the Angels are laying down on sluggers are beginning to make a little more sense.

Not only do players have to take their team’s home state taxes into consideration, but their divisional rivals as well. Players are taxed for “Duty Days,” which are better known as the away games they play.

In the graph below, Pogroszewski has broken down how much taxes an Arizona Diamondback paid in 2014 to other states:

So next time you hear an athlete groaning about the toll that a West Coast swing takes on his body, keep in mind that he’s actually talking about his wallet.

Pogroszewski points out that the JTI has had a pretty serious impact on recent free agents like Robinson Cano and Pablo Sandoval, both of whom ditched states with high income tax for states with low or no income tax whatsoever. If Cano had been offered the same $240 million offer from the Yankees as he received from the Mariners, he would have actually taken home $11 million less had he stayed in New York.

So the next time you appreciate that brand new library or newly paved road, remember that your high taxes might have cost you a chance at a championship.

Photos by Scott Halleran/Getty Images