Henrik Kleven, Camille Landais and Emmanuel Saez looked at movements and performance of top soccer players in 14 countries over decades, tracking successive tax regimes and salary. Tax rates, they found, matter to players, motivating them to shift locales and affecting the record of their teams.
(Bloomberg) discussing this recent paper
According to Business Week my two local baseball teams the Baltimore Orioles and Washington Nationals have the 11 and 15th highest income taxes for major league cities with only NYC and SF being higher for MLB cities.
In short to give the same income to a player as Seattle, Texas or Houston the Nationals and O's must offer almost 9% more to offset income taxes.
So if Spain can give David Beckman a 50% tax break, I figure as a baseball fan why not give the O's and Nationals one too for free agent signings.
As an economist though, I'm skeptical it's a good idea.
h/t to Pete for passing on the article