Pitcher Merrill Kelly signed his first major league contract with the Arizona Diamondbacks in 2018. He has spent most of his career there, and after the team traded him to the Texas Rangers midway through the 2025 season, Kelly returned to Arizona this offseason. He agreed to a two-year, $40 million contract in December.
At the time, Kelly expressed interest in returning due to his love for the city and his trust in the team’s roster. But Kelly more recently shared another reason why he chose the Diamondbacks. while chatting with dirty territoryKelly revealed that she was weighing another offer.
“There was a team in California, I think everyone can imagine who it was. There was a three-year guaranteed deal on the table. I don’t think it’s any secret how much money they take 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 attractive. It definitely made the decision to come back here a lot harder, but once Arizona got to the amount they had, it made a lot more sense to come back here.”
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That other offer was from the San Diego Padres, who were giving Kelly $40 million over three seasons. Sure, it was spread over an additional season, but Kelly would have received the same amount of money… at least, in terms of pre-tax earnings.
Arizona has a flat state tax rate of 2.5%. California has a graduated rate tax based on the amount of income taxed. For anything over $742,954, the tax rate is 12.3%. And to add insult to injury, anyone making $1 million or more pays an additional 1% in payroll taxes.
If he signed with the Padres, Kelly would pay $5,300,116 in state income taxes over the life of the deal. With his deal with the Diamondbacks, he will owe $1 million in state income taxes. That’s a total of $4,300,116 More goes into Kelly’s bank account.
This isn’t the only time we’ve seen a player try to avoid paying taxes in California. Shohei Ohtani’s record $700 million deal includes tons of deferred money; There’s a good chance you’ll be retired and living out of state when you get it.
According to Spotrac, Kelly has earned around $36.6 million throughout her career so far. He is 37 years old, so this is probably one of the last contracts he will sign as a major league player. You are trying to maximize the amount you can keep.