Basketball star Dwight Howard has spurned a five-year $118 million offer from the Los Angeles Lakers, a franchise whose storied history has included some of the greatest players to ever play the game, in favor of a four-year $88 million offer from the rebuilding Houston Rockets.
Speculation abounds regarding the reasoning behind Howard’s choice: He didn’t get along with Lakers’ star Kobe Bryant. He didn’t like the coach. The Lakers’ owner didn’t hire Phil Jackson. He would rather play with young players than the older cast of Lakers’ veterans.
Consensus seems to be that personality and outside factors MUST have played a larger role than economic ones. How else would accepting a lower offer from a lower profile team be a good career move?
Assuming Howard has a competent financial advisor, a theory that merits strong consideration is that marginal tax rates were a factor in the ultimate decision. Perhaps Lakers’ fans burning Howard’s jersey should focus their anger on California Gov. Jerry Brown and the liberals that have run state government in Sacramento for two decades.
California’s tax rates eliminated the advantage of the Lakers’ larger financial offer and allowed Howard to accept employment with a younger and arguably more promising team without sacrificing much additional income.