Saturday, February 05, 2011

Go Packers

Wall Street Journal editorial --

Take the Packers' fleet-footed quarterback Aaron Rodgers. He made $8.6 million in 2009, according to USA Today's database of player salaries. Of that, we calculate he paid roughly $680,000 in state and $3.1 million in federal income and payroll taxes. Steeler quarterback Ben Roethlisberger didn't earn as much, but he got to keep a relatively larger chunk of his haul—$4.6 million of his $7.7 million salary. (This excludes taxes paid to states that tax players visiting on away games.)  Unlike Wisconsin, which has a graduated income tax that charges top earners 7.75% on earnings over $220,000, Pennsylvania has a 3% flat rate. Even football players can behold the merit of a flat tax.

 This is an inadvertent expose of the lunacy of supply side economics.  Does anyone think that Aaron Rodgers puts in less effort or fewer hours because Wisconsin has a progressive state income tax? Indeed, if the Packers lose on Sunday night, will the fans blame the variation in state income tax rates for their loss? Instead, the situation is that both teams have assembled highly talented players who've complemented each other and with a bit of luck, have hit the earnings stratosphere.  And one state has figured out that they have a little bit of that pot without any disincentive effects.  When Vince Lombardi said that winning is the only thing, he didn't have an exception for a 7.75 percent marginal income tax rate.

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