James Harden got what he wanted by getting traded to the Brooklyn Nets, but his new tax bill might not excite him.
James Harden wanted to be traded by the Houston Rockets, with the Brooklyn Nets as a preferred destination from the beginning. He got his way on Wednesday, as what ultimately became a four-team trade was done.
At the salary level Harden is at, $41.3 million this year and $44.3 million next year with a $47.4 million option for 2022-23, he’s not exactly hurting if he’s even remotely responsible with his money. But the move from Houston to Brooklyn stands to cost him plenty.
Harden turned down a two-year, $103 million contract extension from the Rockets, which would have been been tacked on to the money he’s already got coming over the next three years. The pesky salary cap prevents the Nets from being able to do that kind of extension.
In a piece for Sportico, Michael McCann and Robert Raiola dove into the deeper financial implications of the move to Brooklyn for Harden.
Move to Brooklyn will be taxing for James Harden
Harden is moving from Texas, where there’s no state income tax, to New York, one of the highest-taxing states in the country. Harden’s income is now subject to, between New York State and New York City, an approximate tax rate of 12.7 percent. The numbers were run before Harden was to the Nets was hypothetical, and he’s set to lose $13.6 million to taxes over the next three years. That number includes so called “jock taxes”, and assumes Harden will live in New York City.
Aside from tax obligations, the cost of living is also far higher in New York (yes, I’m Captain Obvious). But let’s get into specifics. According to Nerd Wallet, it’s 92 percent more expensive to live in Brooklyn, and 165 percent more expensive to live in Manhattan, than it is to live in Houston. The endorsement opportunities that come with being in the largest media market in the country could offset some of the increased cost.
When this season concludes, Harden will have a career salary of $224.349 million. So losing a significant chunk of pay to taxes, and having to pay more for day-to-day things, might be a worthy price for pay for what looks like a legit shot at an NBA title with Kevin Durant and Kyrie Irving in Brooklyn.