Joel Fox is the Editor of Fox & Hounds and President of the Small Business Action Committee. Read more at Fox & Hounds Daily.

The venue that snares the March boxing match between Floyd Mayweather Jr. and Manny Pacquiao will add millions to the host city’s bottom line. Count California cities out. The reason? Taxes.

The Mayweather-Pacquiao fight is one of the most anticipated in the pugilist world in a long time. Looking forward to a big payday, the Staples Center in Los Angeles offered a $20 million site fee to host the event. Not to be outdone, Jerry Jones, owner of the Dallas Cowboys, said he would host the event in his new football stadium and pay $25 million for the event.

Before any serious bidding war could take place, Pacquiao’s U.S. business advisor threw cold water on the Staples Center offer. Noting that Paciquino would have to pay millions in taxes to California under the current 10.55% top tax rate, the advisor said the fighter didn’t want to fight in California when there were alternatives in no income tax states like Texas and Nevada.

Eliminating the Staples Center as a possible match site means lost millions of dollars for the City of Los Angeles. An official with the Las Vegas Convention and Visitors Authority predicted the fight would mean $10-$15 million if it is held in that city.

Of course, more important than the lost dollars from a specific sporting event is the concept that high taxes do matter in business decisions. Last week I blogged about the suggested tax increases the California Tax Reform Association offered as “low hanging” fruit” to solve the state’s budget shortfall. One item CTRA suggested was raising the top end personal income tax. The organization stated, “State income taxes have no impact on the location of the wealthy…”.

High tax rates clearly have an impact on where high-income earners live and where they work. Even if that work consists of one hour or so enclosed in a boxing ring.

Joel Fox is the Editor of Fox & Hounds and President of the Small Business Action Committee. Read more at Fox & Hounds Daily.