9 States with No Income Tax - NHL CAP

[patnyrnyg]

What about adding endorsement income to the cap?

Very few hockey players are getting endorsement deals in the US.

 

[VivaLasVegas]

This site is not an indicator of hockey fans everywhere.

Or perhaps not even anywhere.

 

[tarheelhockey]

Even the cost of living I am not so sure matters for these guys. Even cities which are relatively cheap have their expensive neighborhoods or suburbs and that is where these guys are living. I have never looked too deeply into any of the studies, but when they compare cost of living and they say things like $100,000 in NYC is the equvialent of $40,000 in Raleigh" I believe they are comparing the median neighborhoods. These guys are not living there.

Pretty sure there’s an actual difference, a really substantial one, between NYC and Raleigh.

A quick check on Sotheby’s shows a listing in Raleigh at $2.75M for 8900 square feet, 5 bed, 9 bath (6 full), sitting on 2.5 acres. Includes a pool, waterfall, wine cellar, game room, etc. Built in 2000.

The exact same price in Manhattan gets you three listings. Two are in apartment towers, one is in a hotel. All are either 2 bed/3 bath or 3 bed/2 bath, with a living room and kitchen being the only other rooms. None lists square footage, but they appear to be in the 1200 range. All three buildings roughly 100 years old.

Now don’t get me wrong, those are lovely properties and priced according to the location. But that’s a completely insane difference in terms of what you get for a dollar. It’s literally the difference between living in an apartment versus a mansion.

 

[glovesave_35]

This site is not an indicator of hockey fans everywhere.

I didn't say it was.

 

[glovesave_35]

Pretty sure there’s an actual difference, a really substantial one, between NYC and Raleigh.

A quick check on Sotheby’s shows a listing in Raleigh at $2.75M for 8900 square feet, 5 bed, 9 bath (6 full), sitting on 2.5 acres. Includes a pool, waterfall, wine cellar, game room, etc. Built in 2000.

The exact same price in Manhattan gets you three listings. Two are in apartment towers, one is in a hotel. All are either 2 bed/3 bath or 3 bed/2 bath, with a living room and kitchen being the only other rooms. None lists square footage, but they appear to be in the 1200 range. All three buildings roughly 100 years old.

Now don’t get me wrong, those are lovely properties and priced according to the location. But that’s a completely insane difference in terms of what you get for a dollar. It’s literally the difference between living in an apartment versus a mansion.

I hear you, and personally I would never go for the NYC option. But there are lots of people who would, especially once you get into the kind of money professional athletes can bring in. Or, maybe they prefer the mansion in Jersey with access to the culture NY has to offer.

 

[glovesave_35]

Because personal choices like what house you live in would create another loophole.

Don't get me wrong though, Molson subsidizing his players to purchase estates to lower their cap hits would be wonderful.

Cool. The owner of my sunbelt team is worth more than double what Molson is. Let's do it.

 

[SA16]

It absolutely is cost control. The leagues wants the players to only receive a set portion of the revenues. Without a cap, they would pay much more. If it was about competitive balance, they would play under the same cap in the play-offs.

The salary cap and the players receiving a set portion of the revenues are not the same thing. You can have players receive a 50% share with no cap. There will just be high escrow. The cap keeps each teams spending within a specific range which should create more balance across the league. If there was no cap, but still a linkage to revenue, the players would receive the exact same amount of money. Competitive balance would be ruined since you would have teams like the Leafs/Rangers etc. who can outspend others and have a much higher payroll (see Baseball). Teams that project, say, a 60M profit on the year are not going to go ahead and spend 70M with no cap unless they don't care if they lose money. They would keep their budget lower and it would be the same thing.

 

[tucker3434]

Right, so we just assume everyone pays 0 and this is somehow better?

Yeah, definitely. Having it flat across the league is far better than handing out bonus cap space somewhat arbitrarily.

 

[tarheelhockey]

I hear you, and personally I would never go for the NYC option. But there are lots of people who would, especially once you get into the kind of money professional athletes can bring in. Or, maybe they prefer the mansion in Jersey with access to the culture NY has to offer.

I guess that's the thing about real estate value... the markets are what they are for a reason. It really comes down to what people mean by real estate "value", whether they mean the physical real estate itself or the entire experience of living in a particular place.

I guess the best method would be to compare near-identical neighborhoods in different cities, but I wouldn't know where to begin doing that. I know anecdotally that a lot of people who move here from the Northeast feel like they got a better living situation for less money, but that has a lot to do with weather and economy and whatnot in addition to the real estate itself... and of course these people are not famous pro athletes, just ordinary folks.

 

[tarheelhockey]

The salary cap and the players receiving a set portion of the revenues are not the same thing. You can have players receive a 50% share with no cap. There will just be high escrow. The cap keeps each teams spending within a specific range which should create more balance across the league. If there was no cap, but still a linkage to revenue, the players would receive the exact same amount of money. Competitive balance would be ruined since you would have teams like the Leafs/Rangers etc. who can outspend others and have a much higher payroll (see Baseball). Teams that project, say, a 60M profit on the year are not going to go ahead and spend 70M with no cap unless they don't care if they lose money. They would keep their budget lower and it would be the same thing.

I think the logic here is a bit dubious. The point of the cap is cost certainty. If there is no cap, there is no cost certainty. If you're a middle-range team like Nashville, you don't know whether you're spending $75M next year or $110M. It all depends on how contract negotiations go, what UFAs are available, what things are looking like at the TDL. Maybe you go all-in, maybe you blow it up for a rebuild, who knows? In the absence of a clear answer to that question, the business model becomes guesswork, which means instability.

Yes the players will receive their 50% of revenue on the back end via escrow, but that doesn't mean runaway spending gets kept in check. If teams are throwing max contracts around like candy, front-loading massive singing bonuses and including all kinds of incentives in the structure, then you end up with total chaos. The only way to compete with that kind of behavior is to match it, so now you've got all the teams tossing around max front-loaded contracts with incentives. Spending spirals up and up, but revenue stays the same. That means teams start operating heavily in the red, busting and relocating like they did in the 1990s when this same stuff happens -- AND players start getting demolished on escrow. Everyone loses in the end, because there's no mechanism to tie spending to revenue.

That's why the salary cap and floor exist. Reasonable limits on spending, both at the high and low end, to keep the payroll close to 50% of revenue. Cost certainty.

 

[triggrman]

Fed tax - 40% of $1000 is $400
State tax - 10% is a $100, $100 x 75% with states with taxes is $75

You don’t take the percentage of what’s left each time.

So you saying you don't get write offs for taxes or direct business expenses? I write off a lot of expenses each year and I'm not taxed on those expenses, why would state be any different? I'm shocked Federal taxes aren't a write off.

 

[triggrman]

Fed tax - 40% of $1000 is $400
State tax - 10% is a $100, $100 x 75% with states with taxes is $75

You don’t take the percentage of what’s left each time.

Also, you don't get charged your full income for each state tax so it's not $75. It's a per game basis and you're only taxed the money you made in that state.

 

[CaptBrannigan]

Very few hockey players are getting endorsement deals in the US.

That’s the point. It’s something that differs from place to place and should be accounted for if you’re of the idea that taxes of any type should be accounted for.

 

[JoelWarlord]

This stuff is so overblown. When people say "teams with no state tax" they really just mean Tampa. For whatever reason the unique circumstances of Tampa including weather, quality of life, internal salary structure, and obviously quality of team just get handwaved away and it gets chalked up as a tax thing. I'm sure the players do think about it but I think you just have to look at the Lightning vs the Panthers to see that taxes are pretty far down the list.

 

[Gamimenos]

Cool. The owner of my sunbelt team is worth more than double what Molson is. Let's do it.

Make it happen

 

[Golden_Jet]

Also, you don't get charged your full income for each state tax so it's not $75. It's a per game basis and you're only taxed the money you made in that state.

I’m aware of all that, I used the example of $1000 net.
75% of games were played in a state with state taxes., according to example. So 75% of $100 is $75.

for example if you paid $400 in federal taxes, the state tax rate is 10% of $1000 not $600.

There was no mention of write offs in the example, so I never included any in responding to the example.

 

[Deadly Dogma]

IMO there needs to be new tax laws that treat pro sports leagues as 1 financial entity, no matter where said players live or play. Basically the NHL would pay all taxes in a lump sum then divide the remainder of HRR by 32 and give teams a net salary cap. Also as a pro athlete under the new rules you cannot be taxed again after the NHL pays the tax

 

[Gamimenos]

IMO there needs to be new tax laws that treat pro sports leagues as 1 financial entity, no matter where said players live or play. Basically the NHL would pay all taxes in a lump sum then divide the remainder of HRR by 32 and give teams a net salary cap. Also as a pro athlete under the new rules you cannot be taxed again after the NHL pays the tax

Neither I, and probably the NHLPA, would be ok with this. I'm sure some (if not all) players make far more and pay far fewer taxes right now than they would under such a system.

 

[Muffin]

This tax thing is overblown. First of all players get taxed where they play, meaning on away games they’re taxed at the city they’re playing in.

Second of all do you really think a millionaire pays tax like a normal person? There are many things an accountant can do.

 

[Golden_Jet]

This tax thing is overblown. First of all players get taxed where they play, meaning on away games they’re taxed at the city they’re playing in.

Second of all do you really think a millionaire pays tax like a normal person? There are many things an accountant can do.

Your right they would likely end up paying more in taxes, seems to be a fan issue not a NHL or player issue.
I would be okay with a US/ CDN dollar currency, say 90-95 cent US dollar, for both sides of the border, to equal out differences.

 

[ziggyjoe212]

Your right they would likely end up paying more in taxes, seems to be a fan issue not a NHL or player issue.
I would be okay with a US/ CDN dollar currency, say 90-95 cent US dollar, for both sides of the border, to equal out differences.

I read this 5x and I still have no idea what you are talking about.

All NHL players, including on Canadian teams, get paid in USD.

 

[Golden_Jet]

I read this 5x and I still have no idea what you are talking about.

All NHL players, including on Canadian teams, get paid in USD.

To make up the difference CDN teams have to pay, call it a NA dollar, all players get 90-95 cents on the US dollar no matter what country they play in. It’s an equalization.
More of an owner benefit.

 

[ziggyjoe212]

To make up the difference CDN teams have to pay, call it a NA dollar, all players get 90-95 cents on the US dollar no matter what country they play in. It’s an equalization.

Why would players accept getting paid 90% of what they're owed? That is an awful idea. Literally not a single player would vote for that. The owners would love that.

This system is as fair as it can possibly be. Every player, regardless of what country he's based in, is paid in the same currency.

Canadian teams aren't poor. Tiny cities like Edmonton and Winnipeg bring in as much money, if not more, than a giant metropolis like Miami and Phoenix.

 

[Deadly Dogma]

Neither I, and probably the NHLPA, would be ok with this. I'm sure some (if not all) players make far more and pay far fewer taxes right now than they would under such a system.

If the tax advantage is no big deal having all players pay what ever the avg tax rate is seems to make logical sense.

 

[triggrman]

If the tax advantage is no big deal having all players pay what ever the avg tax rate is seems to make logical sense.

So every player would have to show their tax return to see what taxes they paid.