The AOC Effect: California’s High Taxes Cost The Giants Bryce Harper

The AOC Effect: California’s High Taxes Cost The Giants Bryce Harper


The AOC Effect: California’s High Taxes Cost The Giants Bryce Harper

Bryce Harper Giants MLB AOC

Bryce Harper might have worn a San Francisco Giants uniform in 2019 if it weren’t for California’s prohibitive taxes | Source: Kim Klement-USA TODAY Sports / Scanpix

It looks like California tax rates, which are some of the highestin the nation,may have costthe San Francisco Giants their shot at top MLB talent Bryce Harper.

The 26-year-old professional baseball star agreed to a 13-year, $330 million deal with the Philadelphia Phillies Thursday.

A report from NBC Bay Area Sports’ Alex Pavlocic suggests there was a bidding war, and California state taxes are too high to make San Francisco competitive for Harper’s talents.

I’m told Giants made a 12-year, $310 million offer to Bryce Harper. They were willing to go higher but would have had to go well over $330 million to get it done because of California taxes.

— Alex Pavlovic (@PavlovicNBCS)February 28, 2019

It’s another tragic case of some of the nation’s best talent and resources being chased out of a community by confiscatory government tax rates.

California Taxes Stifle A Giant $330 Million Deal

Bryce Harper’s dealis the richest contractin this history of North American sports.

A $330 million business was trying to come to San Francisco, but the fiscal recklessness of the government of California deprived its residents of this lucrative enterprise.

Reportedly, the Giants final bid to hire Bryce Harper was $310 million, but the Giants’ front office would have gone higher if only California’s high taxes didn’t make it too expensive for San Francisco’s baseball team to compete with Harper’s after-tax incentive to play for the Phillies.

Robert Raiola, director of the Sports and Entertainment Group at PFK O’Connor Davies, calculatesthat after federal, state, and local taxes, Harper will be compensated roughly $184 million from the Phillies. By comparison, the Giants’ $310 million offer would have netted the slugger approximately $161 million.

.⁦@theaceofspaeder⁩ a look at the taxes#MLBplayers will pay as they travel around the leaguepic.twitter.com/s5Td4ZQktA

— Robert Raiola, CPA (@SportsTaxMan)March 3, 2019

Someone @ Alexandria Ocasio-Cortez

This is remarkably similar to high tax rates in Queens, New York pushing away top talent and resources from Amazon. The retail giant chose not to buildits $3 billion HQ2 there afterlocal activists and politicians like Alexandria Ocasio Cortez demanded Amazon pay higher taxes.

The press and ambitious political activists think they’re doing taxpayers and social welfare recipients a favor to demand that these companies pay higher taxes if they want tobring their business to town.

But, all they’re doing is chasing away business benefiting the local economy, while actually lowering the overall amount of tax revenue the government collects.

The Brain Drain: The AOC Effect

When this happens, we might start calling it “the AOC Effect.”

We just saw it happen with the San Francisco Giantslosing outon Bryce Harper, the most coveted MLB free agent of offseason, due to high taxes.

We saw it when Amazon pulled out of Queens over AOC’s insistence on high taxes.

amazon hq2 queens new york city

High taxes proposed by Alexandria Ocasio-Cortez lead to human capital flight, thus damaging local economies | Source: Stephanie Keith / Getty Images / AFP

We even saw it over the entire 20th century, with the “brain drain” of scientists, engineers, and doctors from socialist countries in Europe to the United States of America.

The technical term for brain drain is human capital flight.

It’s a predictable result of people responding to financial incentives and having many places with a lot of great opportunities to choose from to call home.

In an increasingly mobile and digitally connected world, this means local governments have to keep taxes competitive or see the money and talent flee to a place that does.

Disclaimer: The views expressed in the article are solely those of the author and do not represent those of, nor should they be attributed to, CCN.

About The Author

Wes Messamore

Grew up reading Isaac Asimov, J.R.R. Tolkien, The Bible, Ayn Rand, John Locke, and Robert Heinlein while listening to conservative talk radio, reading used economics textbooks, and reading through most mainstream political newspapers and magazines.

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