- Tyreek Hill: “I had to make a grown-up decision”
- NFL team rankings (SALT winners and losers)
- The September jobs report influences the Fed’s “pivot”
- Chris Campbell: “Musk is buying Twitter” (and the bigger story)
- Waterlogged EVs catch fire in Florida.
Excessive taxes might be the reason the New York Jets missed out on an elite NFL wide receiver…
Hill could always live in NJ, right? Wait, never mind…
Earlier this year, Tyreek Hill was traded from the Kansas City Chiefs to the Miami Dolphins. His $120 million, four-year contract now makes him one of the highest-paid wide receivers in NFL history.
But the Jets were negotiating for the superstar too. “The Jets’ sales pitch focused on their young, homegrown talent, and how Hill could’ve been the player who galvanized it all,” ESPN says.
Yeah? Say it with me…
“The Jets were willing to go dollar for dollar with the Dolphins,” says ESPN, “essentially the same deal that Hill signed with the Dolphins — a four-year, $120 million extension.
“They even offered a bigger Pro Bowl incentive than Miami.”
According to Hill, he came pretty darn close to donning Jets green, but says: “Those state taxes… I had to make a grown-up decision.”
As a matter of fact, Hill’s decision to endorse his trade to the Dolphins will save him $2.7 million in state and local taxes. In 2022 alone.
“Had he played for the Jets this year, he would have owed an estimated $3,191,968, of which $2,984,409 would go to New Jersey” — where the Jets’ MetLife Stadium is located — “and $207,559 would go to other states,” says an article at Tax Foundation.
Instead, playing for Miami, Hill’s state and local tax liability is estimated to be around $475,000 on the $30 million he’ll earn in 2022.
Note: Even though the Sunshine State doesn’t levy income tax, “everyone owes taxes to nondomiciliary states in which they work,” Tax Foundation says, although some states allow “up to 30 days in the state before having an income tax obligation.
“But athletes and other entertainers operate under different rules than the rest of us: Even in states with a multiday threshold, athletes are always taxed, and the calculations are typically based on… the number of days they spent in that state as a percentage of their season.”
Just for funsies then, let’s take a look at which states would have the lowest and highest tax liability for Mr. Hill among the NFL’s 32 teams. I’ll give you a second to place your bets…
So Hill would have paid the least amount of taxes this year if he played for the Houston Texans ($178,534 total), which is significantly less than what he’d pay working for the other Texas team, the Dallas Cowboys, at $375,720.
And it’s a three-way tie for the absolute worst tax liability in football, coming down to the Golden State’s three NFL teams, the Chargers, Rams and 49ers; in each case, Hill would have owed the state almost $4 million.
Judas priest…
Well, did you guess correctly?
Tyreek Hill — while an exceptional talent — isn’t exceptional among pro athletes who compare state-to-state tax liability.
In 2019, we reported the MLB’s Bryce Harper signed a staggering $330 million contract to play for the Philadelphia Phillies, hard-passing on the San Francisco Giants — also forgoing California’s top marginal income tax rate of 13.3%.
Then there was golfer and California native Phil Mickelson who, going back almost a decade now, condemned California taxes, saying: “If you add up all the federal and you look at the disability and the unemployment and the Social Security and the state, my tax rate’s 62, 63%, so I’ve got to make some decisions on what I’m going to do.”
Mickelson apologized a couple days later: “Finances and taxes are a personal matter and I should not have made my opinions on them public.” Are they though? For professional athletes, that is?
From what we can find today, Mickelson will join fellow pro golfers Tiger Woods, Rory McIlroy and Jack Nicklaus on Jupiter Island, Florida. Mickelson purchased a lot there with plans to build a house and move after his youngest child graduates from high school.
Perhaps Tiger finally convinced Mickelson? Woods readily admitted why he quit California for the Sunshine State: “I moved out… back in ’96 for [tax reasons].”
And while Mickelson’s Florida neighbors might be glad to welcome a new golf buddy (debatable, seeing as he comes off as a jagweed), the California tax authorities will most certainly be teed off…
To the market today, where the consensus is the Fed will not have the stock market’s back (see job numbers below).
The tech-laden Nasdaq is taking it the worst — down almost 4% to 10,660. The other two major U.S. indexes aren’t faring much better; the S&P 500 is down 2.8% to 3,640 while the Big Board has shed 675 points — or 2.2% market cap — down to 29,265.
➢ According to the Labor Department’s latest jobs report, unemployment in September dropped to 3.5%, the lowest level in 50 years — which does nothing to bolster the Fed “pivot” narrative. We also point out the unemployment rate is deceptively low, since the number of working-age adults who are not in the labor force (NILF) actually increased. And while wages went up, they’re nowhere near keeping up with inflation. Per ShadowStats — which uses government tables from 40-plus years ago — real-world unemployment fell back to 24.4%.
As for commodities, the price of oil has shot up today, gaining about 5% to $92.73 for a barrel of West Texas Intermediate. At the same time, the price of gold has dropped $14.60 to $1,706 per ounce, and silver’s down over 2%, but still hanging above $20.
Things are about the same in the crypto market: Bitcoin is down 3% to $19,500 while Ethereum is down 2.5% to $1,325 at the time of writing.
“We’ve been fooled before,” says Paradigm crypto expert Chris Campbell, “but it seems official. Musk is buying Twitter… It’s been a long road getting to this point. Lots of twists and turns. (Skeptics are forgiven.)
“First, Elon got invited to join Twitter’s board,” Chris says. “He accepted and Jack Dorsey and Parag Agrawal (founder and CEO respectively) celebrated it on Twitter.
“Then Musk turned tail. Rather than just joining the board, he said he wanted to buy the whole company for $44 billion. (Twitter went wild. His detractors screeched.)
“Then Musk changed his mind again, using Twitter’s massive bot problem as an excuse. (Some say it was really because the stock market crashed and his offer price was then WAY too high.)
“He tried to back out,” says Chris. More screeching, more detractors. “Twitter sued, trying to force [Musk] back into the deal.”
On Wednesday? “Elon said he was going to buy it at the original price.
“There are a lot of takes floating around, but…
“The BIGGEST story here is how this move could onboard millions of people into crypto virtually overnight,” Chris says.
“At first, it wasn’t clear what Elon really wanted to do with Twitter. We kind of knew the ‘what’ (free speech), but we didn’t know the ‘how.’
“The past couple of months have revealed where his mind’s at,” says Chris. “Consider this leaked text from Elon Musk to Jack Dorsey…
Source: Altucher Confidential
“I have an idea for a blockchain social media system that does both payments and short text messages/links like Twitter,” Musk wrote. “You have to pay a tiny amount to register your messages on the chain, which will cut out the vast majority of spam and bots.”
Not only will this eliminate bots, Musk said, “there is no throat to choke, so free speech is guaranteed.”
“This isn’t a new idea,” Chris says. “In fact… Dorsey had been working on it for years.
“In 2019, in fact, Dorsey announced that Twitter was funding a small team” of blockchain engineers, who would report directly to the CEO.
According to Chris, Jack Dorsey was laying the groundwork for Musk to address one of the fundamental problems with social media platforms.
“The real problem is that nobody owns or controls their own data or their ‘list’ — the followings they built,” he says. “Users produce ALL of the value and they get little back in return.
“Everything you post, the social media giant has a right to profit from,” Chris says. “But that’s about to change.
“The BIG idea is that social media companies can allow users to own and control their own data, monetize their followers, in an ad-free environment… and [the companies] can still make money.
“My take? This concept holds a ton of promise,” Chris concludes. “The fact that Musk is considering this model for Twitter is uber-bullish for crypto.
“If Twitter begins moving this way, it will put a stamp of approval for more platforms to adopt this model… and it will onboard millions into crypto virtually overnight.”
Jimmy Patronis — Florida’s fire marshal and CFO — warns of waterlogged EVs catching fire in the aftermath of Hurricane Ian.
“Patronis published a video of firefighters in Naples, Florida, battling a fire started from a Tesla EV’s battery,” says Fox News. “A bystander is overheard in the video saying that the crew had used hundreds of gallons of water attempting to put the fire out.”
So file this under “problems we hadn’t started worrying about yet”…
Who knew fire personnel must be trained and/or read Tesla manuals (like the 2021 Model S Emergency Response Guide) in order to properly put out an EV fire?
- “NOTE: Tesla does not recommend the use of foam on electric vehicles,” the manual says. Good to know…
- “Apply water directly to the battery. If safety permits, lift or tilt the vehicle for more direct access to the battery.” Come again?
- “Use large amounts of water to cool the battery. It can take between approximately 3,000–8,000 gallons.” Imagine doing this in, say, drought-affected California?
Just one more example of the government’s rush to electrify everything without considering the consequences…
“Why was there no Oct. 5 edition [of The 5]?” asks a longtime reader. “I thought I just might have missed it, but I don’t see it on the website either.”
On Wednesday, we re-ran our Aug. 26, 2021, episode of The 5 under the email subject line “Inflation Protection Plan.” (It went out early in the morning… which might be the reason you missed it.)
Speaking of Wednesday’s episode, a reader writes: “Thanks for The Alpha Strategy book.
“Just downloaded it and skimmed a few pages so far,” he says. “Looks like an interesting book, and I look forward to reading all of it.”
And just in time for the weekend too! You all enjoy, and we’ll be back with more of The 5 on Monday.
But if you want to know even more about crazy state regulations — psst, in the state Tyreek Hill rejected — don’t miss Saturday’s highlight issue of The 5.
Best regards,
Emily ClancyThe 5 Min. Forecast
