Wisconsin State Taxes Will Hinder Micah Parsons’ $188 Million Contract

Quarterback Jordan Love #10 of the Green Bay Packers passes the ball under pressure from linebacker Micah Parsons #11 of the Dallas Cowboys at AT&T Stadium on January 14, 2024 in Arlington, Texas. (Photo by Richard Rodriguez/Getty Images)

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Miami Dolphins star wide receiver Tyreek Hill once famously declared that he would have been a New York Jet if it were not for state income taxes. As discussed by Bloomberg Tax, while the notion that state income taxes drive real decisions to the point of impacting where a star football player would play might seem like an extreme claim, the truth is that state income taxes can fluctuate dramatically across jurisdictions. The newest player who is about to figure out this tax lesson is Micah Parsons, who, after demanding a trade from the Dallas Cowboys (located in a jurisdiction with no state income tax) to the Green Bay Packers (located in a jurisdiction with one of the highest state income tax rates) will now pay millions more annually in state income taxes. This article breaks down Parsons’ new contract, and shows how much more in taxes he will face playing for the Packers rather than if he stayed put in Dallas.

After Taxes, Micah Parsons Will Make Close To The Same In Green Bay As What Was Being Offered In Dallas

As reported by ESPN, Parsons agreed to a four-year $188 million contract with the Packers. To put this number into comparison, he will be the highest-paid non-quarterback in the history of the NFL after now making $47 million per year. While he will expect to make nearly $3 million per game (almost $700 thousand per quarter), his salary will also come with substantial tax consequences.

At the Federal level, a single taxpayer with $47 million in annual income will pay approximately $17.3 million in taxes. However, this tax liability does not stop at the federal level, as Wisconsin also levies an income tax. According to the Tax Foundation, in 2025, Wisconsin has a progressive income tax that begins at 3.5% on lower levels of income, before raising to 4.4%, 5.3%, and 7.65% on all income over $315,301. Ignoring implications associated with the jock tax, Parsons will pay approximately $3.5 million in state income taxes in 2025. Not considering employment taxes, this means that his after-tax income is closer to $26 million per year.

While $47 million is a lot of money and more than the $40.5 million reportedly offered by the Cowboys, according to ESPN, state income taxes make the discrepancy a bit narrower. For instance, after Federal income taxes, Parsons would have made about $25.5 million per year playing for the Cowboys. However, Texas does not levy a state income tax, meaning he would not have faced that large additional layer of taxation. The result is that Parsons’ financial situation is relatively unchanged when playing for the Packers at $47 million per season versus the Cowboys at $40.5 million.

The Wide Variation In State Income Taxes In The U.S. Impacts Micah Parsons’ Contract

The NFL teams are scattered across the U.S. in varying tax-levying jurisdictions. Forbes recently reported that this variation can help support some of the variation in outcomes for teams, but that tax aspects like the jock tax can diminish the advantage. While the above calculations ignore the jock tax, it is important to point out that the jock tax requires players to pay taxes based on the state in which the game is played. This notion means that Parsons will only pay Wisconsin income taxes for the 8 or 9 home games played in Green Bay every season. For 2025, the remaining state income tax burden will be spread out among the locations of his remaining games.

While the NFL schedule varies year to year, it is also formulaic. For instance, the Jacksonville Jaguars play an average of 8.5 home games per year (alternating 8 and 9 home games per season), and they are guaranteed to have three away games per year in Texas, Tennessee, and Indiana. The remaining games change every year, but on a rotational basis, so that every team gets to play every team at least once every four years.

Important for the Jaguars is that at least 11 games every year are played in jurisdictions with no or low-income tax levying states. The result is that the Jaguars (along with the Houston Texans and the Tennessee Titans) provide their players with the lowest average state income tax burdens on an annual basis. On the flip side, players for the Los Angeles Chargers, Los Angeles Rams, and San Francisco 49ers face the steepest state income tax burdens since the majority of their games are played in California, which levies a 13.3% state income tax rate.

As it pertains to Parsons, even though his gross contract is larger than what was being offered by the Cowboys, he sacrificed significantly in state income taxes by relocating out of Texas. According to my prior Forbes article, the Cowboys have the fifth-lowest average tax burden once factoring in the guaranteed games every season. Meanwhile, the Packers come in at 23^rd on these rankings. The difference between these two in terms of the average tax rate is over 5%, meaning that for every $20 million Parsons earns, he will pay an incremental $1 million in taxes playing for the Packers than the Cowboys.

While there are clear tax reasons to choose to play for one team over another in the NFL, the situation with Micah Parsons ultimately demonstrates the importance athletes place on the non-tax reasons. After all, the Jaguars, Colts, and Texans are not typically leading contenders to win the Lombardi Trophy. While those looking at Parsons’ Contract may feel he came out way ahead by relocating to Green Bay, this article highlights that on an after-tax basis, it was much closer to a breakeven than what meets the eye.