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Wednesday
Jul162014

Marco Rubio: LeBron James Will Be Economic Boon for Cleveland

US Congress(WASHINGTON) -- As a Miami resident and die-hard sports fan, Sen. Marco Rubio was among the disappointed south Floridians last week when LeBron James announced he’d be returning to Cleveland after four years with the Miami Heat.

But despite a confident tweet predicting that Cleveland wouldn’t snag James back, Rubio said the decision makes sense from James’ perspective. He predicted that “King James” will have his number retired by the Heat and will be “very warmly welcomed” by Miami fans whenever he’s back in town.

“This was one of the things we were surprised about, but not in hindsight shouldn’t have been,” Rubio, R-Fla., said in the latest edition of the Capital Games podcast.

“I think if LeBron James is going to make that move back, this is probably the right time to do it, given those young guys that he wants to play with over there -- it’s going to take them a couple of years to get ramped up so,” Rubio said.

“And we forget these people have lives. I mean, they don’t just play basketball at night. I mean they have children and families and all sorts of things that surround regular daily life, and I imagine he felt like it was time to go back to Cleveland. So I respect that decision,” the senator added.

James’ time in Miami, Rubio said, contributed to strong economic growth in the downtown area. Residents of northeast Ohio might expect something similar, now that they’re likely to have a competitive basketball franchise again.

“I’m not saying that the real estate market took off because of LeBron James. I’m saying it was a factor,” Rubio said. “I imagine it would be positive [for Ohio]. From a point of view of civic pride, that’s been important.”

The Cavaliers have suffered since James left, Rubio said, but are now “relevant again.”

Rubio also discussed tax issues that face professional athletes, who typically have to file multiple state tax returns for income earned both at home and away games.

He said pro franchises are smart to advertise favorable tax situations in the states they’re based in. States including Florida and Texas have no state income taxes, whereas playing in New York or California means higher taxes and therefore smaller paychecks.

“If you start to add up that money it means that a million-dollar contract in Florida is more than a million-dollar contract in New York,” Rubio said.

The podcast also checked in with Robert Raiola, a prominent accountant who specializes in tax issues surrounding sports. He said teams make their relative tax rates part of their pitches to free agents. And he added that athletes are smart to take that into account.

“What you always say: It’s not what you make, it’s what you’re able to keep away. And these NBA players [have] got to be careful because one day the music is going to stop, and it’s not what you make, it’s what you save,” Raiola said.

Former NBA executive Tom Penn recalled comparing tax rates for free agents as part of the regular pitch when he worked for the Memphis Grizzlies.

“Every time we talked to any free agent whatsoever. We didn’t lead with that, but it was right there, top of the list,” said Penn, now an ESPN NBA analyst. “It’s a real differentiator. ...We had our spreadsheets that laid it all out and showed the net effect of working in Tennessee versus working in one of those high income tax states.”


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