Diamondbacks' Merrill Kelly Cites California Taxes In Spurning Padres For Diamondbacks

[Steve Drumwright]

Merrill Kelly had dreams of living on Coronado and pitching at Petco Park with the San Diego Padres for the next three years. But California's high tax rate ultimately made the difference in the right-handed starter choosing to return to the Arizona Diamondbacks.

The 37-year-old said Monday on the "Foul Territory" podcast that the Padres initially had the better deal for three years, but the D'backs eventually increased their two-year offer to make it worthy of turning down the Friars to remain in the desert.

Kelly wound up getting a two-year, $40 million contract from the D'backs with a vesting option for 2028.

"I don't think it's any secret on how much money you get taken out of your pocket when you go to California. There were a lot of factors that went into the three-year deal. It was definitely enticing, it definitely made the decision a lot harder to come back here. But once Arizona, once these guys got to the number they did, it made a lot of sense to come back here."

California has a tax rate of 13% on incomes $1 million and above, while Arizona as a flat rate of 2.5%.

"I love San Diego," Kelly said. "Like I said, they take too much money out of my pocket. The taxes over there are a different level. We had my numbers guy run the numbers and it just made more sense to come home — which is crazy on a two-year compared to a three-year (contract)."

Kelly said he was close to choosing the Padres, but is happy to be able to not leave his family in the Phoenix area.

"It worked out best for us because that was honestly our second choice," Kelly said. "It was between here and San Diego going into the offseason."

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[Stuart Shaffer]

All 50 states have approximately the same overall tax levels.  However, they use various ways of getting the money from their citizens and visitors.  Income and property taxes are more 'in your face' taxes than other revenue sources, such as sales taxes.  A high money earner such as Kelly, working on a contract, is going to be acutely aware of the income tax bite.  However, he'll probably never notice the sales taxes he pays every year.  (Comment: I think Kelly and Nick Martinez are the two most overpaid pitchers in this year's FA class.)