Otule's Improvement

[Pakuni]

I do, but of course, I know married people raising children overseas, have lived overseas for decades and want to hold their US citizenship and feel like the US Government is giving them the shaft.  Now they could change that and move back but they do not, but that does not mean they like it.

Regarding your "worthwhile experience."  Yes, it is, just like studying abroad a year ... it is fun and would recommend to every "kid" without hesitation.  

That said, this is about Otule, not living overseas.  If I'm generous, his body allows him to get through 2 foreign seasons of 70 to 80 games.  Estimating what I think he gets paid and if he lives just above poverty, he comes back to the US at 26 or 27 with 50k to 100k in his pocket.  Then what does he do the next 60 years?

If he is looking to maximize his potential future income, I'm guessing staying at MU a 6th year and getting an advance degree "on the house" and starting his non-basketball life offers him more potential.  The only reason I see him "moving on" is he no longer likes playing for MU, which does not seem to be the case.

For starters, we know nothing of Chris' academic status, so it's pretty presumptuous to suggest he either would need another year to get an advanced degree, would need to be on campus to finish his coursework, whetehr he could do it over a couple of offseasons, or could accomplish it in another year. We have no idea.

Also, it's a bit incongruous to suggest his body couldn't withstand playing in Europe for money, but it's a smart move to spend a year risking his body at Marquette for free. Maybe he gets hurt in Europe, maybe not, but at least he's being compensated for the risk.

Lastly, and most importantly, there's nothing that would preclude him from going to Europe to earn some money for a few years and then returning to Marquette to finish up whatever course work he may need to complete whatever degree he wishes. My guess is that kind of experience and worldliness would be seen as attractive to future employers.

[Goose]

Another MU84

I know married couples that have raised children and lived in the US for decades and feel the US government gives them the shaft. I do have some experience with folks living overseas and the vast majority remain overseas for two reasons, they love where they live or it financially rewarding. Another reason why many younger people remain overseas is because when they return many return to lower paying jobs.

Big companies do an outstanding job of retaining great talent overseas and a better job of churning lesser quality ex pats. There are a great deal of younger ex pats living overseas with a quality of life they never would experience at home. This goes from living expenses, drivers to kids educations.

[bilsu]

I think Otule is back to where he was last year before he got hurt. Not only is the leg sound, but he is no longer worrying about it.

[Tugg Speedman]

I think Otule is back to where he was last year before he got hurt. Not only is the leg sound, but he is no longer worrying about it.

+1 which was the purpose of this thread.  He finally seems to be playing aggressively and it is showing on the court.  It is said it takes about a year to recover from an ACL injury.  In Otule's case the physical part took less than a year but the mental part, as you suggest, took a but longer and he is now seems past it.

[The Lens]

Otule coming back for Year #6 benefits MU a lot more than it benefits him.

[Tugg Speedman]

Otule coming back for Year #6 benefits MU a lot more than it benefits him.

Why is this statement different for Otule than the 12 other scholarship athletes?  Why does it make sense for Otule to leave this summer for Europe but not, say, Jamil Wilson, DG or Steve Taylor?  Why not Deonte Burton for that matter?

Sixth year athletes are very common in Football and Olympic sports.  Why is it some kind of tragedy in basketball?

[Stretchdeltsig]

Eight different players have been SOG this year.  Otule has not been one.

[ATL MU Warrior]

Eight different players have been SOG this year.  Otule has not been one.

and that matters how?

[Sunbelt15]

Otule will come back but Ferguson will leave and one of the incoming recruits will not come. We will have enough scholarships.

[MU82]

Eight different players have been SOG this year.  Otule has not been one.

That means less than zero.

Negative-10, let's say.

[JakeBarnes]

Otule will come back but Ferguson will leave and one of the incoming recruits will not come. We will have enough scholarships.

We only need one of those situations to happen.  Way too early to know which one.

[keefe]

I believe that Keefe can provide the best answer regarding taxes and living expenses.

As for "getting screwed" Another MU84, I have yet to meet a person that worked abroad that did not find it to be worthwhile experience. Everything is relative, if living expenses are covered paying 18% VAT on purchases does not seem so bad to me.

Here's the God's truth on Ex Pat Tax exposure:

The first $95K/$97K with utilities is taken off the top of your income. So if you are paid $195K in HK you only report $100K to the US.

There is NO double taxation! US Tax Code allows for Tax Equalization so you get credit for off shore taxes paid.

You do have to declare as income housing, cars, and other entitlements that typically come with Ex Pat packages. Here is a typical Fortune 100 Ex Pat Compensation "Package":

Salary*
Bonus*
100% Housing*
100% Utilities*
Car*
Driver
2 Home Leaves per year, Business Class Tix for each family member
Household Staff Allowance
International School Capital Debenture(s)
100% International School Fee Tuition**
Club Membership (American Club, Country Club, etc...)
International Health/Dental Care (Includes Air Evac if necessary)
100% Tax Advisory Services
100% Legal Advisory Services

* Indicates Taxable Item
** Partial Taxation

This is what both PepsiCo and GE Cap gave to Level 16's and above. My wife was with Microsoft and their program was similar. She had some touchy feely bull$hit for massages and such that I didn't.

I am brutally simplifying the tax implications but all of the taxable items are totaled, less the Off Shore Income exclusion. Then they take out any taxes paid to off shore jurisdictions. This was complicated as in regional roles there were taxes due in HK, PRC, the Philippines, Thailand, etc... for both of us. Now, a little known secret - the companies pay your off shore taxes in the tax equalization scheme so there is actually zero hit to your income. Also, since we both had duplicated benefits she converted her housing allowance into a local expense payment that was not taxable income in any jurisdiction. I was able to convert part of the school tuition into the same (Partial since school fees are more than $30k per child.)

If the question is should anyone take an expat gig? The answer is yes. Look at the above. You are making well into six figures but your only expenses are food, booze, clothing, and incidentals. I read many of the comments in this thread about expat gigs and the financial comments are just wrong. PM me if you have a specific question. Remember though I am not the Tax authority but wee went through this complicated drill every year so I have some insight.

[Goose]

Thanks Keefe. Could Not have said it better myself. Your post is exactly why I think CO should take the money and run. If you get a chance to be ex pat they should jump at it. maybe you should talk to Another MU 84 and get his "list of ex pat friends" and give them some advice. Sounds like they really are getting the shaft, or maybe just make believe ex pat friends...who knows?

[keefe]

Thanks Keefe. Could Not have said it better myself. Your post is exactly why I think CO should take the money and run. If you get a chance to be ex pat they should jump at it. maybe you should talk to Another MU 84 and get his "list of ex pat friends" and give them some advice. Sounds like they really are getting the shaft, or maybe just make believe ex pat friends...who knows?

No offense to Another MU 84 as the US Tax Code is complicated but basically everything he wrote is, uh, misinformed. I would suggest they get a hold of Tony Tong at PWC HK for expert advice.

[Tugg Speedman]

No offense to Another MU 84 as the US Tax Code is complicated but basically everything he wrote is, uh, misinformed. I would suggest they get a hold of Tony Tong at PWC HK for expert advice.

Keefe we get that you do important things and make decent coin, you bring it up every third post.  But this is a thread about the possibility of a 23 year kid forgoing a 6th year in college to play in Europe.  So I'm not sure how the "typical fortune 100 package" affects Otule's decision.  That said I'm glad you did set Goose straight that you do in fact pay taxes when playing overseas so their is no "80k tax free" option available which is started this entire discussion. 

Instead Otule is looking at 35k to 50k taxable ... provided his body can handle a 70 to 80 game season.

[Tugg Speedman]

Thanks Keefe. Could Not have said it better myself. Your post is exactly why I think CO should take the money and run. If you get a chance to be ex pat they should jump at it. maybe you should talk to Another MU 84 and get his "list of ex pat friends" and give them some advice. Sounds like they really are getting the shaft, or maybe just make believe ex pat friends...who knows?

Goose ... he did not say Otule would pay no taxes.  He would pay that country's taxes and then pay the higher of that country's taxes or the US rate about 97,000.  Europe also has a 18% VAT.  The rest of Keefe's post is completely irrelevant so I have absolutely no idea why it was even posted here.

Fact is Otule will make less money in Europe than the average MU business grad.  Maybe Otule can do it one or two years where the business grade will begin a 50+ year career.

[keefe]

Goose ... he did not say Otule would pay no taxes.  He would pay that country's taxes and then pay the higher of that country's taxes or the US rate about 97,000.  Europe also has a 18% VAT.  The rest of Keefe's post is completely irrelevant so I have absolutely no idea why it was even posted here.

Fact is Otule will make less money in Europe than the average MU business grad.  Maybe Otule can do it one or two years where the business grade will begin a 50+ year career.

Still incorrect. Here are the facts:

Otule will pay zero US taxes on his first $95/97K.

He may or may not pay any taxes out of pocket in his local jurisdiction. Most of that will likely be paid by the employer through Tax Equalization (which has nothing to do with who your employer is - be it a Fortune 100 company or a Swiss BB Team.)

If he earns more than $95/97K he gets credit for foreign taxes paid. Again, because of Tax Equalization he will likely not actually pay anything to the local jurisdiction. Companies pay that to Govt X then get a full credit on their corporate tax bill. His only exposure is to the US.

VAT is NOT Income Tax. It is a form of Sales Tax. And he will get a credit for that on his 1040.

The rest of my post was not irrelevant but it may have been to you since you clearly do not understand this issue.

[Tugg Speedman]

Still incorrect. Here are the facts:

Otule will pay zero US taxes on his first $95/97K.

He may or may not pay any taxes out of pocket in his local jurisdiction. Most of that will likely be paid by the employer through Tax Equalization (which has nothing to do with who your employer is - be it a Fortune 100 company or a Swiss BB Team.)

If he earns more than $95/97K he gets credit for foreign taxes paid. Again, because of Tax Equalization he will likely not actually pay anything to the local jurisdiction. Companies pay that to Govt X then get a full credit on their corporate tax bill. His only exposure is to the US.

VAT is NOT Income Tax. It is a form of Sales Tax. And he will get a credit for that on his 1040.

The rest of my post was not irrelevant but it may have been to you since you clearly do not understand this issue.

I give up ... European players are give a monthly salary in that country's currency subject to that country's tax laws.  If they are from a Foreign Country, be it Croatia, Italy or the US, the rest is their problem to deal with.   They do not pay "no taxes"

[keefe]

I give up ... European players are give a monthly salary in that country's currency subject to that country's tax laws.  If they are from a Foreign Country, be it Croatia, Italy or the US, the rest is their problem to deal with.   They do not pay "no taxes"

There are tax treaties in place that provide for Tax Equalization. A player may have some exposure but it is minimal and not tied to his overall income. So I will grant you that Otule would have some exposure but it would really be about benefits and not income. Trust me. The tax rates in Europe are onerous but that is because of the social safety net for their citizenry. Since an American basketball player will not be use the health care system, the pension plan, etc... he is covered under a tax treaty. Employers will pay most of the tax and then be credited back. For instance, A basketball Club will have a medical scheme for all its foreign players and they submit that documentation to the govt to show that the foreigner will not be a liability - hence the credit.

In Asia the tax codes are much simpler. In HK and Singapore there are flat 15% rates with few exemptions. Employers pay that for you but then are credited back in their corp taxes because they demonstrate expats are not a burden to the local society.

Let me ask: have you ever travelled or lived abroad?

[keefe]

Keefe we get that you do important things and make decent coin

I am a humble retired Air Force veteran living on a fixed monthly pension. My needs are simple - a roof over my head, hot yak butter tea in the morning, a sleeping bag on a packed dirt floor, daal baht twice a day, a shimmering night sky above the roof of the world, and the smiles of orphans to warm the soul. Of these the only thing of importance is to bring joy to a traumatized orphan.

[Tugg Speedman]

Employers will pay most of the tax and then be credited back. For instance, A basketball Club will have a medical scheme for all its foreign players and they submit that documentation to the govt to show that the foreigner will not be a liability - hence the credit.

In Asia the tax codes are much simpler. In HK and Singapore there are flat 15% rates with few exemptions. Employers pay that for you but then are credited back in their corp taxes because they demonstrate expats are not a burden to the local society.

Let me ask: have you ever travelled or lived abroad?

This thread is about Otule, not how smart you are about foreign tax rates (which I could care less about).  We have now established that Goose is wrong that American basketball players in European do not magically get to take home their gross pay ("80k tax free") and Goose even wildly inflates the pay American players get in Europe.

European bball is just like European soccer.  Their is a top tier league like the premiership and various levels under that.  Teams are elevated or relegated up and down the leagues depending on how well they do, just like European Soccer.  My friend Swiss team is the third division and they pay $3,000 month and offer housing (4 guys to a two bedroom garden apartment, not unlike a college apartment).  Karon Bradley (former MU player about 10 years ago) plays for them.

I have been to European Bball games and seen first hand that this Swiss team gets anywhere between 1000 and 1500 people a night, no TV or radio.

Now the top leagues will play close to seven figures.  But that league is where Ricky Rubio played in Spain and has few Americans.  To play in this league you can probably play in the NBA, which is why the Americans are not to be found.  They are more likely to have Russian and Croatian players as foreigners rather than Americans.

The top second tier teams will pay near $100k/year (again the top teams) but again, these are guys they might be able to sign 10-day contracts in the NBA ... about as good as Jerel McNeal now.  The third tier is what I was referring to ... they are glorified high school games.

If Otule wants to leave and get paid, he is not playing for a top team (and neither is Vander).  If he could, then Otule could also get drafted and he should put in for the draft this spring.  If he wants to play in the second tier he better be able to show his body can handle 70 to 80 games a year or they too will pass (Vander could possibly land here right now).  

More likely Otule will be in the third tier.  At this level their are no contracts but $3,000 month-to-month paychecks and good luck.  The reason they are month-to-month is the players want  it to be easy to literally walk out the door if a higher division league comes a calling (minimal buyout).  That is what Karon and rest are doing ... hoping to play well enough to attract the attention of a second tier team and get signed for more money (as in immediately ... "be here in 48 hours").  Otule would start here and try and do the same.  

European basketball is a financial disaster.  Owners overpaid and salaries are too bloated because European teams thought the NBA would expand to Europe and if they spent and acted like an NBA team, they would be selected as an NBA franchise in Europe.  This mentally went up and down the line.  The NBA did not come a calling and they are all choking right now.  Lots of team are in bankruptcy.

So if Otule wants to leave and "get paid"  he is looking at a 70 to 80 game season at $3,000 month-to-month.  Get hurt and your gone.  And, yes, that $3,000 is not "tax free."

Pakuni is correct, none of know Otule's thinking and personal situation.  My opinion is one of an outsider offering a partially informed decision (or a version of an uniformed decision).  That said, it is more informed than the multitude of "I think Otule is leaving" opinions as they incorrectly think like Goose that he can make big bucks in a chauffeured car having fun in Europe.  Nothing could be further from the truth.  It is really hard dirty work, much harder and dirty than playing for MU.  You do it because you want to move up or because you cannot do anything else (like I said before, it beats driving a taxi).

So, if Otule does not want to play next year, then he should retire from basketball and get on with his life.  If he does, I have no problem with that and wish him well.  If, on the other hand, he wants to continue to play, his best option, in my opinion, is to stay with MU.

[keefe]

This thread is about Otule, not how smart you are about foreign tax rates (which I could care less about).  We have now established that Goose is wrong that American basketball players in European do not magically get to take home their gross pay ("80k tax free") and Goose even wildly inflates the pay American players get in Europe.

European bball is just like European soccer.  Their is a top tier league like the premiership and various levels under that.  Teams are elevated or relegated up and down the leagues depending on how well they do, just like European Soccer.  My friend Swiss team is the third division and they pay $3,000 month and offer housing (4 guys to a two bedroom garden apartment, not unlike a college apartment).  Karon Bradley (former MU player about 10 years ago) plays for them.

I have been to European Bball games and seen first hand that this Swiss team gets anywhere between 1000 and 1500 people a night, no TV or radio.

Now the top leagues will play close to seven figures.  But that league is where Ricky Rubio played in Spain and has few Americans.  To play in this league you can probably play in the NBA, which is why the Americans are not to be found.  They are more likely to have Russian and Croatian players as foreigners rather than Americans.

The top second tier teams will pay near $100k/year (again the top teams) but again, these are guys they might be able to sign 10-day contracts in the NBA ... about as good as Jerel McNeal now.  The third tier is what I was referring to ... they are glorified high school games.

If Otule wants to leave and get paid, he is not playing for a top team (and neither is Vander).  If he could, then Otule could also get drafted and he should put in for the draft this spring.  If he wants to play in the second tier he better be able to show his body can handle 70 to 80 games a year or they too will pass (Vander could possibly land here right now).  

More likely Otule will be in the third tier.  At this level their are no contracts but $3,000 month-to-month paychecks and good luck.  The reason they are month-to-month is the players want  it to be easy to literally walk out the door if a higher division league comes a calling (minimal buyout).  That is what Karon and rest are doing ... hoping to play well enough to attract the attention of a second tier team and get signed for more money (as in immediately ... "be here in 48 hours").  Otule would start here and try and do the same.  

European basketball is a financial disaster.  Owners overpaid and salaries are too bloated because European teams thought the NBA would expand to Europe and if they spent and acted like an NBA team, they would be selected as an NBA franchise in Europe.  This mentally went up and down the line.  The NBA did not come a calling and they are all choking right now.  Lots of team are in bankruptcy.

So if Otule wants to leave and "get paid"  he is looking at a 70 to 80 game season at $3,000 month-to-month.  Get hurt and your gone.  And, yes, that $3,000 is not "tax free."

Pakuni is correct, none of know Otule's thinking and personal situation.  My opinion is one of an outsider offering a partially informed decision (or a version of an uniformed decision).  That said, it is more informed than the multitude of "I think Otule is leaving" opinions as they incorrectly think like Goose that he can make big bucks in a chauffeured car having fun in Europe.  Nothing could be further from the truth.  It is really hard dirty work, much harder and dirty than playing for MU.  You do it because you want to move up or because you cannot do anything else (like I said before, it beats driving a taxi).

So, if Otule does not want to play next year, then he should retire from basketball and get on with his life.  If he does, I have no problem with that and wish him well.  If, on the other hand, he wants to continue to play, his best option, in my opinion, is to stay with MU.

The median salary for Americans playing in Europe is $172K. In addition, players receive housing allowances, transport, living expenses, medical schemes, and transportation from and to their home of record. There is minimal out of pocket local tax exposure for players as they are covered by Tax Equalization. Their tax liability is on income above $97K. Any moneys paid out of pocket are netted out of their IRS liability.

So Goose is correct in saying a player will be able to take home his first $97K tax free. It is all his less whatever he spends on food, booze, haircuts, hookers, cohibas, iTunes downloads, and other personal expenses.

For US Tax purposes, if he is at the median he only pays tax on the remaining $75K - which is treated as $75K and not $172K on the schedules. Huge difference in liability.

For Local Tax purposes, his BB Club will pay his tax bill and receive credit on their tax liability. In some jurisdictions the exposure on USD172K can approximate 70% but this gets reduced quickly since the club will prove the player is not receiving benefit from the myriad social programs (medical, unemployment, pension, parity schemes, educational schemes, retraining, etc...) that citizens and PRs get.

So assume the player gets his tax exposure down to appox 15% on his $75K taxable income his net liability is appox $11K which is an effective tax rate of 6.4%. Since his housing, transport, utilities are covered and he receives per diem that covers most out of pocket expenses and food he really only spends on booze, hookers and cohibas. Let's say he spends $2K/month on pleasure his net annual earnings is $137K.

As much as I would like Chris to stay one more year I think he should get on with life and make some money in Europe. Since he likely isn't into hookers or cohibas and doesn't drink like a fighter pilot his retained earnings are likely higher than what is outlined here. Let's say he has a nice run of 5 years - he can have a nice nest egg set aside before he is 30.

[Tugg Speedman]

The median salary for Americans playing in Europe is $172K.

Let's say he has a nice run of 5 years - he can have a nice nest egg set aside before he is 30.

Link for that salary claim please becasue it seems wildly off ... by a factor of three

http://www.sportsagentblog.com/2012/07/30/nba-d-league-vs-european-basketball-why-dont-more-players-go-to-europe/

The worst part about basketball players staying in the USA and playing in the D-league is the fact that most D-league salaries range from only $12,000 to $24,000. Average overseas players can get a $65,000 contract with ease.  Depending on the league that players get into in Europe, salaries can start as high as $100,000.

Not quite $172,000 ... and that $65,000 includes a bunch of players that are much better than Otule, like DJO that were actually drafted and put on an NBA uniform this year.  Again, if you think Otule can get $65,000 to $100,000 year in Europe that he should hire an agent and try and get drafted this coming spring as they are about the same odds.  Neither is happening.

Regarding a "5 year run" ... think about Otule's last five years playing for MU on a 30 game schedule.  He has missed 2 of the last 4 years due to injury.  Given that history, what makes you think he can play the next five in a league that plays 70 to 80 games a year?  I would like it to happen but to leave under the assumption that is body is now ready for 350 games over the next five years is not a good one.

[Goose]

Another MU84

Your point on CO is valid. Difference between CO and DJO is size. Big men are hard to find and get paid for size.

[Tugg Speedman]

Also not mentioned in this conversation is Many European leagues restrict the number of foreign players, typically to 1 or 2 per team.  Teams also prefer veteran players that have experience in Europe over rookies given how hard the transition is.

http://www.globesportsmanagement.com/USA%20players%20in%20Europe.htm

Number of import players allowed per team:
1st div, 2nd div, 3rd div 4th div, 5th div

France 2 2 1 1 (64 teams) 2 (144 teams)
Italy  4  3  only ITA passports starting from 3rd Divisions  
Spain 3 non E.U. 2 1
Greece 2 2
Turkey 2 2
Germany 2 1 1 to . (regional rules - hundreds of teams)
Belgium 2 1
Luxemburg 1 1 1 1
Generally . 2 1 / 2 Local rules
Holland No limit

-----

So to even get into the top few divisions you have to considered one of the top 100 Americans not playing in the NBA.  Otherwise it is a third or fourth division team.  Is Otule even in the top 100 of the NCAA right now?

Pay by division (I bolded third and fourth division monthly salaries) ....

Average monthly salary for an import player (in US) : a rough idea with a few examples
1st div 2nd div 3rd div 4th div 5th div
France 11000 ,5000 ,2500, 1500 including maybe a job besides bball 1000 including maybe a job besides bball
Italy  15000, 10000 , 2500
Spain 15000 (some 50 000 !) 7000 5000
Greece 20 000 80000
Turkey 15000 7500
Germany 5000 (some 25 000) 3000 1500 1500 1500
Holland 3500 1500
Luxemburg 2500 1500
Switzerland 4000 1500
England 2500 1500
Poland 6000 3000
Scandinavia 4000 2000
Eastern Europe 3500-50000 ?

Keep in mind that the economic situation in Spain and Greece is so bad that some lower division clubs have flat out stopped paying players.