While (almost) everyone is sitting down to watch the Super Bowl, not everyone is going to realize the Carolina Panthers and Denver Broncos will have to pay to participate in the game. Forbes first pointed out this ridiculousness, blaming, you guessed it, California’s insane taxes:
Win on Sunday, and [ Panthers QB Cam ] Newton will pay California a total of $159,560 in taxes in 2016. Lose, and he will pay $159,200, based on an income reduction of $51,000…
In looking at the seven days Newton will spend in California this week for Super Bowl 50, he will pay the state $101,600 on $102,000 of income should the Panthers be victorious or $101,360 on $51,000 should they lose.
The result: Newton will pay California 99.6% of his Super Bowl earnings if the Panthers win. Losing means his effective tax rate will be a whopping 198.8%. Oh yeah, he will also pay the IRS 40.5% on his earnings.
Cam Newton isn’t just going to have to pay California and the federal government for what he earns at the Super Bowl. The Libertarian Republic points out Newton will also have to pay North Carolina for what he does in California because that’s where he lives. There are plenty of people who will sit there and say, “So what? Cam Newton and the rest of the NFL can afford to pay this stuff.” The players may not even realize how much the have to pay because they’ve got accountants to do their taxes and don’t have to worry about sweating the April 15th deadline. This may be the case, but California’s taxes don’t just go after players, but others who visit California on business (the ones who aren’t paid millions to play a game or oversee a game). It isn’t just California where this is an issue. TurboTax has an entire FAQ dedicated to nonresident state returns (emphasis mine).
Every state has its own rules regarding nonresident returns. For example, nonresidents with more than $33 in Pennsylvania-sourced income must file a return, while nonresidents with less than $600 in Missouri income don’t have to file. If you’re not sure, your best bet is to contact the Department of Revenue in that state, or visit their website. Most state websites have a section devoted to nonresidents and part-year residents.
Note: If the other state happens to be Alaska, Florida, Nevada, South Dakota, Texas, Washington, or Wyoming, you won’t be able to file a nonresident return because those states don’t collect income tax. However, you’ll still need to report that income on your resident state return (assuming your resident state collects income tax) as well as your federal return.
This is just ridiculous. It makes no sense to me for someone who works in one state (even if it’s for a day or a week or two), but lives in another state to have to pay taxes twice. It’s just the government trying to soak up as much money as possible. For all the talk of “fair share” by the Left, this isn’t a situation of being fair at all. Why should people be punished for doing two days worth of work in the state they don’t live in? Why should people who work in one state, but live in another state, have to pay taxes twice? Isn’t this the government hurting the people they claim to want to “protect” by taking as much as possible? It just seems like a failure of logic for a government to tax people who don’t even live in their state (let alone really use their services). The solutions are sadly not as simple as they seem. Yes, it’s easy to just proclaim, “Elect fiscally responsible leaders,” but politicians want to appear like they’re doing something to “help the community.” This means changing the definition of “helping the community,” and making sure it’s more from a freedom and liberty standpoint instead of just a “I got more money from others” standpoint. People who prefer low (or no) taxes will have to explain to others why it doesn’t make sense for the government to take money out of their pockets (and that a “tax refund” is just the government giving taxpayers back cash they already earned). It also means being willing to look at what the government (federal, state, and local) spends it money on, and deciding whether the spending needs to be cut or not. This means people can keep more of their own money and have more wiggle room in their own budgets, which isn’t a bad thing. It means the individual has more power over the government, which isn’t a bad thing either. It’s just something to remember AFTER the game is over and the players are celebrating the Super Bowl.
After all, tax season is right around the corner and plenty of people are going to have to deal with the headache of multiple forms and multiple checks. There’s a better way, but people have to be willing search for it.