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Merrill Kelly Picks Diamondbacks on $40 Million Deal, Says California Taxes Ruled Out Padres

Analyses estimate the tax-rate gap could leave him roughly $2.1–$2.5 million more per year in Arizona.

Overview

  • Kelly said on Foul Territory that California’s tax burden was the decisive factor in choosing Arizona over a reported three-year offer from San Diego.
  • He agreed to a two-year, $40 million contract to return to the Diamondbacks after considering the Padres as his only other serious option.
  • Tax comparisons cited in coverage note California’s 13.3% top income tax versus Arizona’s 2.5% flat rate, plus California’s 1.3% State Disability Insurance withholding.
  • New York Post calculations estimate an annual take-home difference of about $2.13 million from income tax alone, rising to nearly $2.5 million when SDI and typical property-tax differentials are included.
  • The Padres told The California Post they do not comment on contract negotiations, and Kelly confirmed his 2026 season start will be delayed due to a back injury.