The Chicago Bears are in the market for a pass-rusher to bolster their defensive line. But taxation in Illinois’ can make it difficult to lure talent from other states.
The Bears targeted Seattle’s Michael Bennett, whose younger brother Martellus stars at tight-end for Chicago. Brad Biggs from the Chicago Tribune placed Chicago’s offer at around $8.5 million per year, while Seattle’s winning bid came in at $7.13 million per year for four years.
One source says #Bears offering $8.5 million per year for Michael Bennett and #Seahawks at $8 million annually. That is word around league.
— Brad Biggs (@BradBiggs) March 10, 2014
With a chance to play with his brother Martellus and more money on the table, what made the Bears’ offer fall short?
Staying in Seattle will keep Michael Bennett with the Super Bowl champs, and one of the league’s greatest defenses. It would be hard to walk away from Seattle’s incredible success.
But one factor overlooked in sports commentaries is that $8.5 million in Chicago is not the same as $8.5 million in Seattle.
The state of Washington does not tax income. The state tax bill on $8.5 million in Illinois is about $425,000.
Meanwhile, Illinois politicians are seeking to change the state constitution to allow for a progressive tax. Proposed progressive tax schemes will make the problem worse.
Under state Rep. Naomi Jakobsson’s progressive tax scheme, Bennett’s state tax burden would shoot up to $755,000. A plan proposed by Center for Tax and Budget Accountability would see his state taxes go up to $920,000.
In contrast, Washingtonians soundly defeated a 2010 resolution to levy a progressive income tax on only the top 1 percent of income-earners. Washington isn’t going to tax its Super Bowl champs anytime soon.
Illinois can learn from Washington. The tax reform that Illinois needs is to throw out ideas of punishing success with progressive taxes, and stop taxing work altogether.
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