Baseball Salaries and Income Taxes: The "Home Field Advantage" of Income Taxes on Free Agent Salaries
In 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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- Jon Bakija & Joel Slemrod, 2004.
"Do the Rich Flee from High State Taxes? Evidence from Federal Estate Tax Returns,"
Department of Economics Working Papers
2004-12, Department of Economics, Williams College.
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- Andrew Healy, 2008. "Do Firms Have Short Memories?," Journal of Sports Economics, , vol. 9(4), pages 407-424, August.
- John Charles Bradbury, 2007. "Does the Baseball Labor Market Properly Value Pitchers?," Journal of Sports Economics, , vol. 8(6), pages 616-632, December. Full references (including those not matched with items on IDEAS)
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