The Lakers are one of the most successful teams in NBA history, with 17 championships, the most recent of which was won in the 2023 Midseason Tournament. In this innovative tournament, the Lakers defeated the Celtics with a 4-2 overall score, and LeBron James also won the MVP honor for his outstanding performance.
Each player on the Lakers received $500,000 in prize money, and it looks like they're the biggest winners of the tournament. But are these bonuses really that many?Su Qun, a well-known basketball commentator, popularized a surprising fact on Weibo: these bonuses are not after tax, but before tax. After deducting all kinds of taxes, the actual prize money received by each player is only 23$10,000. What's going on?Why is the Lakers' prize money being eaten up by more than half by taxes?
Regarding the distribution of prize money, the Lakers won their first all-time midseason championship with a 7-0 winning record. Each Lakers player, as well as a member of the coaching staff, will receive $500,000. The Pacers lost the championship with a 6-1 record, and all players on the team will receive $200,000 in prize money.
The prize money for the other teams is divided as follows: The Bucks and Pelicans both reach the Final Four Finals, and the coaching staff of both teams will each receive $100,000The Celtics, Suns, Kings and Knicks all made it to the quarterfinals, and the coaching staff of all four teams will receive $50,000 each. These winnings are tax-free and come straight to $500,000, which is a huge asset for role players and two-way players.
To answer this question, we need to consider two factors: the annual income of the Lakers' players and the place where the Lakers' players live. According to U.S. tax law, the personal income tax rate is divided according to the amount of annual income, and the higher the income, the higher the tax rate. For example, the tax rate table for 2023 is as follows:
It can be seen that the Lakers' players all earn more than $523601 a year, so their winnings are taxed at the highest rate of 37%. However, that's not all, as Lakers players also pay state and city taxes. The Lakers are based in Los Angeles, California, which has the highest state tax in the country and the highest upscale tax rate of 133%。The city tax in Los Angeles is $15%。In this way, the tax to be paid on the prize money of the Lakers players is 37% + 133%+1.5%=51.8%。
That is, the $600,000 prize money each received will be paid 518% tax, which is 31080,000 dollars, the remaining 28$920,000 is the after-tax bonus. And that's not all, as Lakers players also have to pay Social Security and Medicare, both of which are taxed at a rate of 62% and 145% out of a total of 765%。In this way, each person gets 28The $920,000 prize money has to be handed over by 765% tax, which is 2$210,000, the remaining $26$710,000 is the final prize.
From the above analysis, it can be seen that although the Lakers' bonus seems to be a lot, after various taxes and fees are deducted, the actual amount received is only less than half of the initial amount. This surprised and puzzled many people, and some even thought it was unfair. But know that the Lakers' prize money isn't all of their income, it's their extra income.
The main income** of the Lakers' players is their high salary, as well as their other income. Although these incomes are also taxable, they are taxed at a lower rate than bonuses, and the total amount of income is much higher than bonuses. James won the MVP of the midseason