Originally posted by voodoochile:
#1) In Halladay's tax bracket he will pay the highest tax rate(approx. 40%) on all income both in Canada & the US. Taking only $2 million in a Signing Bonus(in a back loaded $42 million deal he should have gotten $5mill.-$6 mill. if he took a deferred bonus)would have saved him at least in excess of $500,000 a lot of money even when you sign for $42 million.
How would that save him anything? In Canada Signing Bonuses are taxed @ only 15% & in the US there is no Social Security witholding on a Signing Bonus.
#2) Signing Bonuses are paid in a lump sum salaries are paid in incremental payments. If Halladay took a Signing Bonus & invested it in almost anything, in addition to saving the tax money he would have earned money on his money.
For this he also had to pay Landry's commission. A bad deal anyway you slice it.
1) You cannot make that statement with any validity without knowing what would be taken away in the "out years" in return for the upfront bonus. You can only speculate.
2) I dont see how you could make that statement without knowing what Mr. Hallady's personal reinvestment rate assumption is.
3) I dont consider dodging US income taxes as the right thing to do.
4) Social Security taxes are not even a rounding error for Mr. Halladay.
These are just some observations on the financial aspect of the deal.
I am sure there are other aspects that havent been cited here.