Can taxes affect your favorite NFL team? According to the American Accounting Association (AAA), there is. According to a paper presented, by Matthias Petutsching of the Vienna University of Economics and Business, “there is a significant negative relationship between the performance of NFL teams and the personal income tax rates of their home states.”
The paper goes onto say that higher-tax states can inhibit a team from attracting a quality player. NFL players are paid well, and for that reason, they are considering the tax implications when choosing a team and how it will affect their bottom line. Often players well negotiate for a higher contract to compensate for the high tax rate. Unfortunately, with a strict salary cap, a team may be unable to meet the demands, leaving the player to play for a team in a low-tax state.
The study found that between 1994 and 2016, “Teams in high-tax states win on average 0.2 games less per each percentage point of tax differential.”
“Players’ location attachment is small,” said the study. “In general, professional athletes are aware of and react to tax rate differentials, whether by migrating to low-tax locations or by negotiating the higher tax cost into their salary packages.”