Read the whole thing at Reason. Excerpts:
According to K. Sean Packard, a CPA writing at Forbes.com, Jersey will indeed treat the players dirty when it comes to taxes:
If Manning is able to play next season, his New Jersey income tax would be $46,989 on $92,000 for winning the Super Bowl, or 51.08%. If they lose and he is able to play in 2014, he will pay New Jersey $46,844 on his $46,000, which amounts to a 101.83% tax on his actual Super Bowl earnings in the state—and this does not even consider federal taxes!
Manning’s tax liability would be less, Packard explained, if the 38-year-old Denver Broncos quarterback were to retire after the Super Bowl, because New Jersey looks at the total income, even when not playing in the state, and because the Broncos play the Jets next season, so New Jersey’s state government gets a take of that too. The taxes paid by Manning and the other Broncos and Seahwawks players for merely competing in New Jersey in a league event, will also fall quite short of how much tax money New Jersey has wasted holding the Super Bowl.
Bilking athletes, though, is nothing new. Jamaican track star Usain Bolt, for example, is boycotting sporting events in the United Kingdom until their tax laws are loosened, while golf star Phil Mickelson was bullied by wealth redistribution advocates for complaining about his onerous tax rate, eventually apologizing for quite rightly pointing out that onerous federal and state (for Mickelson, California) tax laws would cause him to consider drastic changes in his life. Mickelson pays 61 percent of his winnings in taxes, an uncomfortable fact tax boosters tried to deny.