And generally speaking, it works, as it should. But Los Angeles’ usual trump card – the fact that they are the Lakers and no one else is – won’t work when it comes to courting Dwight Howard, who does not enjoy the pressure felt in Los Angeles from both media and fans.
The Lakers' biggest threat to re-signing Howard is generally considered to be the Rockets. Houston has almost everything Howard is said to desire. He will instantly become the best player on a highly competitive team where he will be loved unconditionally with very, very minimal pressure to win - at least in the beginning.
[RELATED: Rockets the frontrunners for Dwight Howard]
What the Lakers are said to have, more than anyone else, is cash. As Howard's most recent team, Los Angeles is allowed to offer him a five-year, $118 million deal. Everyone else can "only" offer him four-years and $88 million, seemingly $30 million less.
But that is a ridiculous notion. If Howard signs a four-year deal instead of a five, it's not like that fifth year vanishes. He doesn't have to take a year off and sit out. He simply signs a new contract - in Howard's case, presumably another maximum deal - a year earlier. So unless Howard doesn't think he'll be worth that in four years, the extra season isn't a factor.
Broken down, the Lakers contract comes out to around $23.5 million each year, while the Rockets (and others) averages to $22 million per year. That's just $1.5 million per year, a total of $6 million over four years.
The reality is actually more complicated than that. All teams can offer Howard the same salary in his first year, somewhere around $20.33 million dollars. The Lakers, as Howard's most recent team, can then increase that salary by 7.5 percent each year. All others, however, can only increase Howard's salary by 4.5 percent. Over a four-year span, that only comes out to roughly $4 million dollars more Howard would get re-signing with the Lakers.
Then taxes come into play. The way NBA players pay income tax is complicated. It is not based on their residence, but rather the location each game is played. If Howard re-signs with the Lakers, he will pay California state income tax on his 41 home games and six in-state road games (two each with Golden State, Sacramento and the L.A. Clippers). When he travels to play, say, the Houston Rockets, he will pay the Texas state income tax, which is nothing.
Literally nothing. Texas is one of nine states that does not have an income tax. California, on the other hand, has the highest tax rates in the country - 13.3 percent for the top earners, which Howard most certainly is. That's 41 games Howard will have to shave 13.3 percent off of his paycheck, instead of 41 where he gets to keep the whole thing.
Over a four-year contract, that is approximately $6 million dollars Howard will lose to taxes in California, more than offsetting the additional $4 million he would make with the Lakers. Factor in endorsement income and the real number is probably higher.
So don't be fooled by the notion that the Lakers can offer Howard more money than the Rockets or any other team. Unless Howard isn't worth the dollars everyone expects in four years, it's actually Houston who can offer him more.
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