Did the Taxman Make Howard a Rocket?

All-Star Center Dwight Howard accepted less money to sign with the Houston Rockets than he could have earned had he remained on the Los Angeles Lakers, yet it appears he actually increased his after-tax income.  According to analyses rounded up by Paul Caron at TaxProfBlog, Howard stands to make more money with the smaller contract.  Texas doesn’t have a state income tax while the top marginal income tax rate in California  is 13.3%. As a consequence, the smaller contract is actually a better deal.  It also doesn’t hurt that Houston could be a legitimate title contender next year.