College athletes who finally won the right to earn money off their own names are learning the same lesson every working American already knows: the tax man always gets his cut first — and he takes the biggest piece.
The NCAA's NIL regime was sold as liberation for student athletes. Instead, it turned teenagers into independent contractors fending off quarterly estimated tax payments, a 15.3% self-employment tax, and state tax regimes that can swallow nearly half their earnings. The universities still collect their billions. The agents take their percentage. And the IRS walks away with the lion's share of whatever's left.
Forbes broke down the numbers on the top 25 college football earners and the picture is stark. Texas quarterback Arch Manning topped On3's estimated NIL valuation list at $6.8 million — and owed $2.47 million in federal income tax alone. That's before state taxes, before self-employment tax, before any agent or advisor gets their finger in the pie.
The self-employment tax is the trap nobody warned these kids about. Because NIL income isn't classified as wages, student athletes are treated as independent contractors under the tax code. That means they get hit with the full 15.3% Social Security and Medicare levy — the portion an employer would normally cover — on top of ordinary income tax. They also must make quarterly estimated payments and track calendar-year income rather than the school-year schedule they actually live on.
Then comes the state tax wedge. Nine of the top 25 earners play in states with no income tax — six in Texas alone — and their effective rates cluster around 36-37%. But the two California-based athletes face an effective rate near 49%. Oregon's Dante Moore, with a $5 million NIL valuation, takes home over $200,000 less than Ohio State's Jeremiah Smith at the same valuation because Oregon's top bracket sits at 9.9%. Moore's valuation is $750,000 higher than Washington quarterback Demond Williams Jr.'s, yet their after-tax incomes are nearly identical.
And it's not just athletes feeling the squeeze. In Cook County, Illinois, 1.3 million homeowners and 100,000 businesses are about to see their property tax bills rise again — the 32nd straight annual increase, according to the Chicago Tribune. The total levy across the county hit $19.9 billion, up $744 million from last year. About 60% of taxing bodies raised their levies above the 3.1% inflation rate. Homeowners will shoulder nearly $600 million of the new burden, while commercial property bills actually dropped a median 3.5%. It's the fifth straight year the tax load shifted toward residents and away from business properties.
The county also carries 419 tax increment financing districts that siphoned $1.9 billion in diverted property tax dollars for economic development projects in 2025 alone.
Follow the money in either case and the pattern holds. The NIL system was pitched as justice for the working-class kid who just wanted to play ball. Instead, that kid now gets to be a sole proprietor filing Schedule C before he's old enough to rent a car. The homeowner in Illinois gets to subsidize TIF districts and watch commercial properties get the break he can't. The institutions — the NCAA, the universities, the taxing bodies — always get paid. The people who actually generate the value get what's left over.
