The shock of Lebron James leaving Cleveland has worn off by now for basketball fans. I don’t know the first thing about basketball and don’t know if in terms of the sport he made the right choice. I do, however, know a thing or two about economics and believe that he made the right choice. Economically speaking that is.
Due to Florida’s friendly tax laws, James stands to take home more of his paycheck. Even though he is earning less than what he made playing in Ohio, he will be able to keep more of what he does earn. What’s not to love about that?
James isn’t the only one moving to a state that has friendlier tax laws. Millions of average Americans are doing the same thing. Many Businesses are also doing the same thing, too. Businesses and people are going to follow the money. States like Ohio and others hit hard by the recent recession, like Michigan, could stand to learn a thing or two from James. If these states want to keep their people, businesses and possibly sport superstars, they need to lower taxes.