Could state income tax hurt Alabama's effort to land a top-tier basketball coach?

Wichita State head basketball coach Gregg Marshall (photo captured from video)

TUSCALOOSA, Ala. – The University of Alabama’s Athletics Department has made it no secret that they have their eye set on one man in particular to lead the Bama Basketball team into a new era—current Wichita State Shockers head coach Gregg Marshall. But could the lower tax rates in Texas, whose team is also reportedly looking at Marshall to be their next coach draw him away from Sweet Home Alabama?

Alabama Athletic Director Bill Battle has hinted that he’s willing to pay Gregg Marshall upwards of $4 million a year to lure him away from the relatively small Kansas school. Another name in the mix, Shaka Smart is reportedly also being considered by both Alabama and Texas. There are no reports for what kind of offer Texas may have on the table for Marshall or Smart, but the country’s second most populous and second largest state may already have a leg up because they can offer them something Alabama can’t—no state income tax.

In Alabama the state income tax tops out at 5 percent. While this is smaller than the income tax in, say, New York (12 percent) it is infinitely larger than the 0 percent charged by the Texas state government.

And more taxes could be on their way if Governor Bentley’s proposals are approved by the state legislature.

Five percent of $4 million is $250,000 a year that could be due to the state government. While deductions will lower that number some, it still means that Alabama’s next basketball coach could be paying more in taxes every year than most people in the state make in several.

So, maybe Gregg Marshall or whoever UA hires next will value the job over the extra money he’d be able to keep by accepting a job in a tax-free state (Tennessee is also looking for a new coach, and they don’t tax wages either), but there are undoubtedly many businesses who take a look at Alabama’s tax burden compared to its neighbors and decide to relocate in Georgia, Florida, or Texas instead.

While UA’s head basketball coach may be the highest-profile job listed in the state right now, it certainly isn’t the only employment opportunity in Alabama.

Just last week the Heritage Foundation’s chief economist Stephen Moore said Alabama should get rid of its income tax to become a more competitive state for industry.

“The goal of Alabama should be to be more like Texas, not to be more like New York, where taxes keep going up year after year, and jobs and businesses keep leaving,” Moore quipped.