James was a 2003 NBA draft pick and has won many honors throughout his career, and even though James is now 38 years old, he still maintains his top competitive form. For example, James is currently representing the Lakers in the playoffs, impacting the 5th NBA championship of his career, and has such an outstanding performance at such an age, which can be called the first active NBA!
James is not only competitive but also has high commercial value, so the Lakers are naturally willing to provide James with a good annual salary. James earned a whopping $44.47 million this season, but only $16.32 million remained, what's going on? In fact, this is related to NBA taxes, let's explain the details of NBA tax deductions!
James' annual salary is $44.47 million, but this money needs to be divided into 5 parts, namely federal taxes, NBA escrow, state taxes, agent commissions (plus health insurance premiums), and the actual amount. In other words, James's annual salary needs to be deducted from the first 4 parts, and the rest is the amount he actually received, so James only received $16.32 million, which is far from the $44.47 million shown in the contract.
Why is James' annual salary deducted so much? Look at the part that James needs to deduct, federal taxes will deduct $16.4539 million (37% of annual salary), NBA escrow will deduct $4.447 million (10% annual salary), California tax will deduct $5.91451 million (13.3% annual salary), and finally 1.3341 million US dollars (3% annual salary) to process agent commissions (plus health insurance premiums), these four parts add up to deduct $28.14951 million.
James' annual salary of $44.47 million is astronomical, but the part he needs to deduct ($28.14951) is also an astronomical amount, and in the end, James' actual annual salary is only $16.32049 million. If James wants to increase the amount he actually receives, there is a very effective way, and that is for James to join teams in other states. Because the Lakers' California needs to deduct 13.3% state taxes, which is very unfriendly to California-based teams such as the Lakers and Warriors.
If James joins a team in another state, the state tax that James needs to deduct can be reduced, and the actual annual salary will be increased accordingly. However, the Lakers team is more exposed, James has reached the final stage of his career, staying in the Lakers is conducive to him expanding his business sector after retirement, it depends on James's own choice!