Seattle, Adding a ‘Millionaire’s Tax,’ Joins Those Putting Their Pro Sports Teams at a Competitive Disadvantage

Washington is about to impose an income tax on millionaires, giving Seattle the highest combined top rate in the nation. As places like New York City mull similar hikes, one argument against them may resonate more than standard supply-side arguments: The impact on professional sports trying to attract top talent. The “millionaire’s tax” bill is on the desk of Washington’s Democratic governor, Robert Ferguson, and he indicates that he’ll sign it. It will impose a 9.9 percent tax on an estimated 200,000 households earning over $1 million starting in 2028. Seattle’s top combined rate would jump to 18 percent. The NFL’s Seattle Seahawks and the NHL’s Seattle Kraken would be impacted by Washington’s decision to leave the ranks of the nine income tax-free states. The Seahawks quarterback, Sam Darnold, has the team’s highest annual salary at $37.9 million a year; the Kraken defenseman, Brandon Montour, earns $8 million. Last month, California’s “jock tax” crossed from the world of sports to mainstream conversation following Super Bowl LV at Santa Clara. Sacramento imposes a non-resident tax on visiting athletes and performers based on the number of “duty days” spent there, with a top rate of 13.3 percent applied to their total salary.The Seahawks earned a $178,000 bonus per player for capturing the Lombardi Trophy, leaving Mr. Darnold with an estimated tax bill of $249,000. This means that he’ll pay California about $71,000. A five percent tax on billionaires’ net worth is also advancing in the Golden State and driving out residents. Since players have limited time to earn big money, they maximize their income. The Athletic noted last month that “$5 million in New York or Toronto is not the same as $5 million” in Florida or at Dallas. Their survey of 120 NHL players found that 86.3 percent said that income taxes “mattered” when they decided where to sign. In 2013, a winger for the New Jersey Devils, Ilya Kovalchuk, abandoned a $77-million NHL contract for Russia’s KHL — and its flat, 13 percent income tax rate. He would have paid more than half of his income in taxes had he stayed with the Devils.Last year, the Florida Panthers captured the Stanley Cup, the fifth of the past six champions based in states with no income tax. In July 2024, Stephen Whyno of the AP wrote that it had “become difficult to deny the impact of favorable tax situations around the league” on free agents. “There is a distinct advantage,” a consultant for NHL players, Alan Pogroszewski, told AP, “for those teams that are in states with no tax — always.” With Washington adding the “millionaire’s tax,” the six franchises in Nashville, Florida, Tampa Bay, Dallas, and Las Vegas will increase their competitive advantage. In 2024, the general manager of the Nashville Predators, Barry Trotz, told TSN that Tennessee’s tax climate gives him an “advantage” in contract negotiations, “because your dollar goes a little bit farther.” The seven NHL franchises in Canada face the opposite situation.Canadian players are slapped with an income tax rate up to 53.5 percent in Ontario and the Canadian dollar is worth just 73 cents of a greenback. “Will you stop?” the NHL commissioner, Gary Bettman, said when the issue was raised in June 2025 on TNT, calling the idea that finances affect rosters a “nonsense issue.” Mr. Bettman repeated his stance on the “Real Kyper & Bourne” podcast last January. He noted that California, “which has about as high a tax rate as anywhere in Canada,” had won the same number of Stanley Cups as Florida’s franchises at that time.Yet Florida added another championship last year, while none of the seven NHL franchises based north of the 49th Parallel has accomplished the feat since 1993. Winning is the only metric that matters to fans, and they’re noticing the pattern.Voters might show little sympathy for Seattle or New York City soaking faceless millionaires. Losing out on top players, and championships, though, gets their attention. It’s a visceral example of the impact high taxes can have on people — driving them to take their talents to places that take less of their money.

Seattle, Adding a ‘Millionaire’s Tax,’ Joins Those Putting Their Pro Sports Teams at a Competitive Disadvantage

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