The Absurdity of 'Duty Day' Athlete Taxation

August 22nd, 2020 by 
Basketball swishing through a net

Here on Don't Quit Your Day Job... we like to defend people from absurdity – even people who can stick up for themselves. That's the case today: we'll turn our attention to an unfair tax paid by professional athletes. Let's tackle duty day taxation.

What is Duty Day Taxation?

Duty Day Taxation – sarcastically known as the Jock Tax – is a levy some states and cities impose on athletes who compete or practice while in town (or state).

It works like this: for every dollar a player earns on contract, there is a duty day calculation which divides their schedule between cities and states. Well, not just players – athletes, coaches, players, trainers, staff, referees, and everyone else in a professional organization goes through the same practice.

Bake it all in, and you're looking at some pretty hefty Jock Taxes. Imagine being a player in a low cost city yet having to write a check for riding the bench in a game in San Francisco or New York City!

Jock Taxes Example: Super Bowl 2014

The 2014 Super Bowl – Super Bowl XLVIII – was played in East Rutherford, New Jersey at MetLife Stadium on February 2, 2014. The Seattle Seahawks destroyed the Denver Broncos 43 - 8.

New Jersey destroyed everyone by demanding a cut of their 2014 income. For most athletes that meant roughly 8 days in New Jersey (of ~ 235 duty days for full-time Football Players in 2014).

To wit: Peyton Manning (Quarterback for the losing Denver Broncos) returned to New Jersey in October of that year and defeated the Jets 31-17. Those additional days in New Jersey likely pushed him to 10 days duty in New Jersey that year, entitling them to a tax cut.

Kurt Badenhausen in Forbes did the math on poor Peyton Manning. Manning earned a bonus around $46,000 as runner-up Quarterback in the 2014 Super Bowl. He paid roughly $47,000 in taxes in New Jersey that year. In other words, he paid roughly 102.2% in taxes on bonuses he earned in New Jersey!

Seems fair, right? (Check out his math on Cam Newton - who paid well over 150% of his marginal California earnings for his Super Bowl 50 loss.)

The Burden of Duty Day Athlete Taxes

Again, we know it's hard to get too angry over a few hundred thousand dollars in taxes paid by future Hall of Famers on 8 digit contracts

But: can you really argue that this tax treatment is fair?

Andrew McCutchen's Paycheck in 2015 illustration duty day taxation
One paycheck from Andrew McCutchen's in 2015 showing Duty Day Taxes

Last year Andrew McCutchen, All-Star Center Fielder for the Pittsburgh Pirates, caused a minor stir. A fan (Reddit user Grassiii, who has since left) found his paystub lying on the floor while touring Wrigley Field and posted it on Reddit.

Instead of the predictable railing against the large paycheck, the comments concentrated instead on the crazy number of deductions.

McCutchen maxes out his 401(k) – a nice touch. But, people were really shocked by all the localities and states listed on the paystub. It required a second page to list everything!

In net, his very large paycheck didn't look quite as large once you saw the deposit line.

Sure, $427,000 in post-tax income is more than 99%+ of people made in 2015. But two pages of duty day taxes? Pretty absurd.

The Jock Tax is Unfair, but the Victims Aren't Sympathetic

When we write our contrarian screeds on how athletes are underpaid, (twice!) generally we're arguing for the athletes that don't make it big. For every professional athlete, we can find those who didn't make it. That includes Heisman winners with blown out knees or kids with too many concussions that don't even make it to the draft. 

Still, this is different altogether: once athletes are in the big leagues they have more issues and complications than most of us will ever see.

Answer honestly: how much thought do you put into submitting taxes for those business trips you take?  Jock taxes are another stealth issue that most of us wouldn't see unless a few people seized on the absurdity of it all.

Kudos to Mr. Badenhausen for doing the math.

What do you think of duty day taxation?

Don't Quit Your Day Job...

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