In trading for cornerback Jalen Ramsey, the Dolphins also have acquired his contract. That contract eventually will be revised.
Per a source with knowledge of the situation, it hasn’t happened yet. The final result will entail reduced cash in 2023, more cash in 2024, and a full guarantee for 2023 and 2024.
In short, he’ll emerge from the trade with a better contract, as expected.
Under the existing deal, Ramsey would have only $12.5 million fully guaranteed, in the form of 2023 base salary.
He’s currently due to make $17 million in 2023, $18.5 million in 2024, and $19.5 million in 2025.
Ramsey also will get an indirect raise by swapping California’s maximum individual tax rate of 13.3 percent for Florida’s zero point zero. While he’ll still pay state taxes for road games (when road games are played in states with state income tax), Ramsey will realize a significant difference when it comes to home games.
Consider this fairly simple example. At a salary of $18 million per year (i.e., 18 weekly checks of $1 million each), a home game in California costs $133,000 in taxes. In Florida, it costs not one red cent.
The Ramsey trade meshes with a prediction Deion Sanders made when Ramsey first arrived with the Rams. Although it took longer than Deion expected, the reasoning was solid: “One thing is that Jalen is a businessman. . . . Taxes in California, the cost of living in California is not feasible to a guy who’s just coming out of Florida.”
It’s an important angle for players to remember as free agency arrives. Agents may not care, because they get their percentage regardless of whether state taxes are an issue. For players with options, however, it’s important to ask an accountant to crunch the numbers before making a decision.
