A Competitive Edge? The Impact of State Income Taxes on the Acquisition of Free Agents by Major League Baseball Franchises

In this paper, I will attempt to assess the impact of state income tax rates on the acquisition of free agent talent by Major League Baseball franchises. In order to do so, I have conducted regression analyses using four different dependent variables to measure the quality of free agent talent acquired. I hypothesized that the dependent variable, quality of free agent talent acquired, will have a negative relationship with the independent variable, state income tax rates. Therefore, teams residing in states with lower marginal tax rates should be able to acquire more quality free agent talent