Baseball Salaries and Income Taxes: The "Home Field Advantage" of Income Taxes on Free Agent Salaries
AbstractIn this paper we examine the impact on the salaries of free agents in Major League Baseball of differences in state and local individual income taxes between major league cities, in an attempt to see if income taxes affect player salaries. Our basic specification suggests that each percentage point of an income tax raises free agent salaries by $21 to $24 thousand; other estimates indicate even larger impacts. Our findings suggest that the existence of this additional salary demand means that low tax cities (e.g., Florida, Texas, and Washington) have a "home field advantage" in the baseball free agent market.
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Bibliographic InfoPaper provided by Tulane University, Department of Economics in its series Working Papers with number 1209.
Length: 24 pages
Date of creation: Jul 2012
Date of revision:
Tax incidence; free agents; income tax; luxury tax;
Find related papers by JEL classification:
- H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
- H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
- L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-08-23 (All new papers)
- NEP-PBE-2012-08-23 (Public Economics)
- NEP-SPO-2012-08-23 (Sports & Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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