Wow! This must have been embarrassing for Newsom.
When veteran pitcher Merrill Kelly chose to return to the Arizona Diamondbacks for the 2026 MLB season, it wasn’t just another free agency decision.
It became a real-world example of how high state income taxes — particularly in California — are influencing major financial decisions, even in professional sports.
After briefly pitching for the Texas Rangers in 2025, Kelly hit the open market. The San Diego Padres reportedly offered him a competitive three-year contract.
Instead, Kelly chose a two-year, $40 million deal to return home to Arizona.
Why?
Taxes.
California’s 13% Tax Rate vs. Arizona’s Flat Tax
Under Governor Gavin Newsom, California maintains one of the highest state income tax rates in America — 13% on earnings above $1 million.
Arizona, by contrast, has moved toward a much lower flat income tax rate of roughly 2.5%.
For a professional athlete earning tens of millions, that difference isn’t small. It can mean millions of dollars over the life of a contract.
Kelly didn’t hide the financial reality behind his decision.
“I don’t think it’s any secret how much money you get taken out of your pocket when you go to California,” Kelly said during an appearance on “Foul Territory.”
He added that after consulting with his financial advisor, the numbers were clear.
“We had my numbers guy run everything, and it just made more sense to come home.”
For readers concerned about rising taxes, inflation, and cost-of-living pressures — especially those nearing or in retirement — Kelly’s decision may feel relatable.
Why More Athletes Are Watching State Tax Policy
State tax environments are increasingly becoming part of contract negotiations in professional sports. Players consider:
- State income tax rates
- Property taxes
- Cost of living
- Long-term financial preservation
- Estate and retirement planning
For high earners, the difference between 13% and 2.5% can dramatically affect long-term wealth.
While the Padres reportedly offered an additional year on their deal, the financial math — combined with personal roots — tipped the scale toward Arizona.
Arizona Isn’t Just Business — It’s Home
Kelly’s connection to Arizona runs deep. He attended high school in the state and played college baseball at Arizona State before launching his MLB career.
He spent the first seven seasons of his professional career with the Diamondbacks, building relationships with fans and teammates.
“Returning to Arizona was always the priority,” Kelly explained.
Though he spoke positively about San Diego, he was candid about the financial realities.
“I love San Diego… but the taxes over there are a different level.”
He even joked that desert living suits him better than the California coastline.
“The desert is home,” he said. “I guess we’re not ocean people.”
2025 Season Recap: Why Kelly Was in Demand
Kelly posted a 12–9 record in 2025 while splitting time between Arizona and Texas after being acquired midseason by the Rangers.
His consistency and veteran leadership made him one of the more attractive pitching options in MLB free agency entering 2026.
The Padres declined public comment regarding contract negotiations.
A Larger Economic Question
Kelly’s choice reflects a broader national discussion:
Are high-tax states putting themselves at a competitive disadvantage — even in professional sports?
For many Americans, especially those watching their retirement savings, small business margins, or investment income, the idea of keeping more of what you earn resonates deeply.
While baseball is still America’s pastime, the financial side of the game is impossible to ignore.
And in this case, the numbers spoke louder than the coastline.
Why This Story Matters
- It highlights the real financial impact of state tax policy.
- It underscores how wealth preservation influences career decisions.
- It reflects ongoing migration trends from high-tax to lower-tax states.
- It connects sports headlines to broader economic policy debates.
As the 2026 MLB season approaches, Diamondbacks fans will see a familiar face on the mound.
But off the field, Merrill Kelly’s decision may serve as another data point in America’s growing conversation about taxes, opportunity, and economic freedom.
