The sun will come up tomorrow but for now, more bad news for Ohio…
LeBron James, known as King James (perhaps in his own mind as Ohioans by and large do not think so now), announced last night he is leaving the Cleveland Cavaliers to play basketball for the Miami Heat.
There is no doubt that the news media’s non-stop coverage pulled me in (as I do not follow NBA), but my ears really perked up when Ohio Democrat Governor Ted Strickland and his campaign team added fuel to the LeBron-fire. Governor Strickland (and Democrat Senator Sherrod Brown) even sang a “We are LeBron” verse in a “We are the World” spoof begging LeBron to stay in Cleveland! The Ohio Democrat Party also jumped into the LeBron frenzy by creating a website complete with a silly Kasich-bashing YouTube video.
I’m all for politicians attempting to seem relatable to the masses by keeping in touch with pop culture, but a simple tweet or facebook post will do that. Ted and the ODP actually put their political weight behind and placed their bets on LeBron choosing to stay in Cleveland in order to help Strickland score political points in his re-election bid. Apparently Strickland and the ODP feel that the role of government and its elected officials is to interfere in a sports-world business contract. Government is expanding rapidly into numerous areas where it shouldn’t be so I guess they feel that the sports world should be added to the mix. They are political losers for doing so.
So who wins, politically speaking?
In a strange turn of events, that must have ODP Chairman Chris Redfern scratching his head, John Kasich actually comes out ahead and wins politically for staying out of LeBron-mania! John Kasich rightly decided not to jump into the LeBron-frenzy because Ohio has lost 400,000 jobs under Governor Ted Strickland and did not want ONE extremely high paying job to take attention away from the economic hurt our state is in. But now is the time to react!
Ohioans have an incredible tax burden between the high state income tax and the Ohio estate (death) tax! LeBron James, by choosing to play basketball in Florida, has saved himself millions due to Florida not having a state income tax. Business & Media Institute reports that LeBron saves himself $5.69 million in Ohio income taxes based on a $96 million contract by leaving Ohio and the Cavs. The numbers only go up from there if LeBron had decided to play basketball in New York or New Jersey! LeBron could pay at least $5 million in taxes in Ohio OR he could go play in a state that won’t charge LeBron state income tax on his quest to become a billionaire athlete? Easy call for LeBron to make even though he says it isn’t about the money.
My advice is for John Kasich to start driving north on I-71 immediately. I hope Kasich’s team is scheduling a press conference outside of Quicken Loans Arena ASAP. Kasich can start talking about the negative economic impact LeBron’s decision to Cleveland and Ohio. Doing this would give him the opportunity and press coverage needed to connect with Cleveland residents who may not know who John Kasich is, by using a very real and relatable example to explain the positive effect lower taxes/no state income tax would have on Ohio. This will allow Kasich to turn around Strickland and the ODP’s attacks by relating to Ohioans’ pain over LeBron’s choice, increasing Kasich’s name ID, promoting fiscally conservative principles, and gaining needed votes for November!
400,000 jobs lost under Ted Strickland’s failed leadership is awful but right now in Cleveland, finding out it is 400,001 jobs now that LeBron is leaving, is a sucker-punch to the gut and Ohio’s economy…
Only state income tax is mentioned.
How much Municipal Income Tax does LeBron pay? (Based on his home address, is he a resident of Cleveland, paying on all his income? That includes the basketball player salary, endorsements income, bank interest income, etc.)
Or, does he pay Commuter Wage Income Tax (CWIT) to Cleveland? Here, you need to look up the address of the basketball stadium, and verify that it is within Cleveland municipal. Then, LeBron would owe for every home game played at the Cleveland stadium. For CWIT income, endorsements would not be taxed (unless there’s a public appearance within any municipality with a CWIT?). For CWIT income, obviously, bank interest income and other stock income is not taxed. CWIT is based on only income that can be shown was earned IN the city.
If he pays CWIT income to Cleveland, if his residence also has an income tax and a Reciprocity agreement with Cleveland, then he gets credited by Cleveland for the residence income paid. I.e., he CWIT obligation is reduced by the amount of income tax paid to his Residence municipality.
After his move to Florida, when LeBron plays in Cleveland, technically Cleveland can now attempt to bill him for Commuter Wages. (I believe Columbus tried this with Rush Limbaugh, and it got swatted away by his lawyers.)