Robinson Cano Trades in Pinstripes for No-State-Income Tax

Just as talks between the Seattle Mariners and Robinson Cano looked to be over after the All-Star second-baseman and his agent (rapper-turned-sports agent Jay-Z) rejected a 9-year, $225 million offer, both sides came to an agreement Friday on a 10-year, $240 million contact. With this new deal in place, Cano’s days donning New York Yankee pinstripes are over, as are the days of having to pay one of the largest state and local tax burdens in the nation.

In addition to paying a top marginal federal income tax rate of 39.6 percent plus a 3.8 percent Medicare surtax, Cano was responsible for a state tax burden of 8.82 percent while playing in New York from 2005 to 2013. Another 3.648 percent can be added if the MLB slugger chose to live in New York City, effectively bringing his total tax burden to a whopping 55.87 percent. With New York City’s mayor-elect Bill de Blasio promising to increase taxes on the top percent of earners in the city, it’s easy to see why Jay-Z fought hard to get his client out of the Big Apple.

By signing with the Mariners, Cano will see his state and local tax burden go from a potential 12.29 percent to 0; leaving him on the hook for the federal rate of 43.4 percent mentioned above (39.6 percent plus 3.8 percent). Had he received and signed the same deal from the Yankees, the after-earnings would be almost $3 million less per season:

While $3 million dollars less a season might not seem like much to the talking heads of the media world, Cano will in fact be earning $30 million more over the duration of his new contract with Seattle — further proof of why the earning potential for individuals of all tax brackets is greater in no-income-tax states such as Washington.