Big earners like Cliff Lee mean big city taxes

The Phillies’ agreement to re-sign Cliff Lee, represents more than just a major windfall of pitching for the team.  It also may represent a minor windfall of tax revenue for Philadelphia.  Lee will earn between $100 million and $120 million over the next five seasons.  Just how much of that money Lee will pay in taxes all depends on where he decides to take up residence.If he lives in Philadelphia, Lee will likely pay more than four million dollars on those earnings through the city’s wage tax.  If he lives elsewhere, he could pay less than two million.John Kostenbauder is the Tax Director of the Philadelphia office of Wiser Mazars accounting firm.  He says city residents are taxed on all of their earnings, at nearly four percent.  But if Lee lives outside the city, as most pros do, then the city can’t touch anything he earns on the road.”I would say that more than half of Mr. Lee’s salary will be subject to city wage tax because they’ll factor in the number of days he’s practicing in the city as well as the games,” said Kostenbauder.Tax revenue from pro-athletes is important to the city budget according to Revenue Commissioner Keith Richardson.”The sports industry just alone probably for the calendar year so far of 2010 probably has generated about $13.8 million thus far,” Richardson said.