An actual breakdown on taxes per team

[triggrman]

rich people don't really pay taxes, they just complain about them lol. this is something that hfboards posters care about. nhl'ers have accountants.

op did some great work and it's interesting at a high level, but there's a lot of incorrect information floating around here.



only know this because a buddy just moved from toronto to dallas... it is more expensive

Cost of Living Comparison Between Toronto, Canada And Dallas, TX, United States

www.numbeo.com

perception wise, most people would never think that, given how much people bitch about canadian taxes and think texas is some sort of low cost haven lol

And Nashville is slightly higher than Dallas FWIW.

 

[JianYang]

Rangers get free agents all the time. Granted they do overpay a little but I don't think it's blatantly bad. Devils have also historically re-signed their players to fair deals and they are in the same tax rate as Toronto. Montreal does seem to be at a huge disadvantage because of their much higher rate + the francophone thing.

Seeing the rates really affirms to me how bad Dubas was at negotiating.

Montreal does well enough. Europeans seem to like it, and they have a good track record of retaining guys they want to keep outside of the bergevin era.

I think they are in a spot where they can't rely on the ufa market for a franchise guy, but they do have a history of getting useful peices when they are in the buyer mode.

 

[Legion34]

There needs to be some due diligence done, but if done with care, you can bridge the tax gap significantly.

The Tavares situation most likely has to do with his residency status and that becomes a question of fact on various primary and secondary ties to Canada. I am sure he is not nearly the only one playing in Canada with that status.

Edit just read the article, and it seems like he actually declared Canadian residency after the signing bonus, which is interesting in itself. This is going into the treaty now and out of my scope.

I'd be interested if there is any case law floating around over a similar situation.

That would imply that there is also no tax advantages in other states. There is zero evidence that players can make the same take home in NY LA Tor Montreal

There are plenty of agents. GMs. Accountants and players who openly say that they can get tax advantages by signing in no state tax markets.

There was one vague reference by Allan Walsh. And his own tax guy on air wouldn’t confirm.

 

[JianYang]

That would imply that there is also no tax advantages in other states. There is zero evidence that players can make the same take home in NY LA Tor Montreal

There are plenty of agents. GMs. Accountants and players who openly say that they can get tax advantages by signing in no state tax markets.

There was one vague reference by Allan Walsh. And his own tax guy on air wouldn’t confirm.

I'm just stating with the appropriate tax planning, the discrepancy can be bridged significantly, and it's not as significant as the gross figures would suggest. Now I can't say that will be forever because tax codes are fluid, but we can't predict such changes.

There are currently around 9 Americans on the canucks roster, and some hefty priced Americans too who would have had free will to move elsewhere. Either they love paying additional tax in a foreign country or the difference isn't stark enough to be a game changer.

 

[Voight]

Player agents have stated that the actual differences are minimal. There are so many different tax breaks and ways to get around things. This is more of a media driven thing than anything else.

@Hockey Outsider has a great post about Matthews along the lines of this. Thought I had it saved but hopefully he does.

Do these numbers take into account the US and Canada tax treaty?

I think it's a pretty complex issue and there's alot of variables to consider. For one, Canada will tax based on residency status whereas the US will tax based on citizenship. It is entirely possible that some (probably many) players playing in Canada are doing so as non residents of Canada which is a potential game changer with respect to their tax obligations.

The tax treaty trumps the income tax act and whatever the Americans call their tax code.

I believe Matthews is taxed as a resident of Arizona, which saves him a lot.

 

[SmytheKing]

If player agents take percentage on the gross player salary they would not like their players taking advantageous pay cut but end up with higher effective revenues post-tax because of the state they play in....

Not really a disinterested party.

When you look at the price of housing when you buy like an nhler (-60/70% in Dallas) and the income after tax difference, I doubt it is really more expensive, electricity cost more but that such a small thing versus those 2.



That a myth (why spend fortune on politician with tax cut politics if you already do not pay taxes..., just by conviction for the public good ?), specially for an hockey player type of rich people (person that made money via a big salary).

depend where, in the US, rich people pay a giant disproportional amount of the federal income taxes for example.

It often find them, in 2021 Elon Musk paid 12 billions in personal income tax (plus everything his company pay, municipal tax, consumption tax on purchase and so on)

Now do the years prior to this where he didn't pay anything. Also, the reason his tax bill was so high was because he exercised his stock options to get about $23 billion dollars for about $150 million dollars. You see how that works? You talk about disinterested parties above and neglect to point out that the REASON they spend a few tens of millions of dollars on politicians is so they don't have to pay even MORE in taxes. Also, when you have $250 billion dollars, paying $11 billion once after basically getting $23 billion for free IS paying nothing in taxes.

It's always weird to watch relatively poor folks go hold wild to defend guys who take advantage of them and reduce funding for systems and programs that would otherwise assist.

Also, this tax advantage nonsense for teams is just silly stuff. The advantages have been there in every sport forever. Tell me how well those advantages have helped the Devil Rays or the Marlins in baseball. Or the Magic or the Heat in basketball. Or Florida or Tampa in hockey prior to the past 7 years. Your team sucks because you have a bad front office. I should know as a Kings fan.

 

[Golden_Jet]

@Hockey Outsider has a great post about Matthews along the lines of this. Thought I had it saved but hopefully he does.



I believe Matthews is taxed as a resident of Arizona, which saves him a lot.

Matthews does save a lot, and because of that residency he gets to claim most of his signing bonus at a 15% tax rate. His salary is 95% signing bonus.

As a result Matthews has the highest net take home pay of any player.

 

[MadLuke]

REASON they spend a few tens of millions of dollars on politicians is so they don't have to pay even MORE in taxes.

you seem to agree with me that it is not true that the rich does not pay taxes... I am not sure to what you disagree exactly. yes the year without much revenues or capital gain, rich pay little taxes.

The advantages have been there in every sport forever.

Player salary were not particularly high, there was no salary cap. But I never talked about the advantage of it or its absence in sport (not sure nice climate would not be strong, playing in California or Seattle despite high tax is probably quite tempting for example)

 

[Legion34]

Rangers get free agents all the time. Granted they do overpay a little but I don't think it's blatantly bad. Devils have also historically re-signed their players to fair deals and they are in the same tax rate as Toronto. Montreal does seem to be at a huge disadvantage because of their much higher rate + the francophone thing.

Seeing the rates really affirms to me how bad Dubas was at negotiating.

???? This is the whole point. No one is saying other teams don’t get free agents.

The NYR are the most popular American team. Tons of players want to sign there and force their way there.

They do NOT in any way get discounts from stars. Tax free markets do

Matthews does save a lot, and because of that residency he gets to claim most of his signing bonus at a 15% tax rate. His salary is 95% signing bonus.

As a result Matthews has the highest net take home pay of any player.

Again. This is misleading. It is “possible” that he can. He also doesn’t get to claim all of it.

He has to prove he has greater financial ties to Arizona. That includes days in country. Property. Car leases. Spouses etc.

The althletic had an article from an accountant and the basic idea was that it was hard to do over a long period.

It’s possible. But a lot of hoops and actual life restrictions. You can’t just pay a guy to do it for you.

 

[Legion34]

Now do the years prior to this where he didn't pay anything. Also, the reason his tax bill was so high was because he exercised his stock options to get about $23 billion dollars for about $150 million dollars. You see how that works? You talk about disinterested parties above and neglect to point out that the REASON they spend a few tens of millions of dollars on politicians is so they don't have to pay even MORE in taxes. Also, when you have $250 billion dollars, paying $11 billion once after basically getting $23 billion for free IS paying nothing in taxes.

It's always weird to watch relatively poor folks go hold wild to defend guys who take advantage of them and reduce funding for systems and programs that would otherwise assist.

Also, this tax advantage nonsense for teams is just silly stuff. The advantages have been there in every sport forever. Tell me how well those advantages have helped the Devil Rays or the Marlins in baseball. Or the Magic or the Heat in basketball. Or Florida or Tampa in hockey prior to the past 7 years. Your team sucks because you have a bad front office. I should know as a Kings fan.

Sweet Jesus.

No other league has 6 Canadian teams (making us residency harder) and no other league has a triple hard salary cap with these rules. It wasn’t an advantage before because rich teams used another unfair advantage (back diving deals) to compensate.

Comparing other sports is just silly.

 

[soothsayer]

Of all people, Allan Walsh has figured it out. . . . People should really stop citing a tweet from a guy who is a few bricks short of a load about something as complicated as tax law.

 

[Section 104]

Some states have higher sales tax to compensate for a low income tax

Larry Brooks of the NY Post says there should be a way to allow teams in higher tax states (like the New York Rangers…surprise! surprise!! surprise!!!) to have a higher payroll. Of course he ignores that Jimmy Vesey and Adam Fox refused to sign with Carolina and Nashville.

 

[JianYang]

@Hockey Outsider has a great post about Matthews along the lines of this. Thought I had it saved but hopefully he does.



I believe Matthews is taxed as a resident of Arizona, which saves him a lot.

Yep, I'm curious why Tavares set himself up as a resident of Canada after the signing bonus.

With an American spouse, if he still kept a residence in New York and lived outside of Canada for half a year, I'd assume he has a decent case to be a non resident of canada too.

 

[Golden_Jet]

???? This is the whole point. No one is saying other teams don’t get free agents.

The NYR are the most popular American team. Tons of players want to sign there and force their way there.

They do NOT in any way get discounts from stars. Tax free markets do



Again. This is misleading. It is “possible” that he can. He also doesn’t get to claim all of it.

He has to prove he has greater financial ties to Arizona. That includes days in country. Property. Car leases. Spouses etc.

The althletic had an article from an accountant and the basic idea was that it was hard to do over a long period.

It’s possible. But a lot of hoops and actual life restrictions. You can’t just pay a guy to do it for you.

It’s not misleading it’s a fact and I never said he claimed all of it.
He has the largest take home pay, as no other US player, playing in Canada gets a 95% signing bonus,

Sure he has to be mindful of how many days he spends in Canada, and he does.

 

[Harvey Birdman]

Player agents have stated that the actual differences are minimal. There are so many different tax breaks and ways to get around things. This is more of a media driven thing than anything else.

Canadians just want to piss and moan because they have not won in so long. I hope the Oiler’s win, not so McDavid gets a cup, but so collectively Canadians can just shut the f*** up for at least 10 minutes about it not being fair. It’s exhausting.

 

[viper0220]

Player agents have stated that the actual differences are minimal. There are so many different tax breaks and ways to get around things. This is more of a media driven thing than anything else.

Very true, Allan Walsh actually did a full video on this I think, I just can’t find it.

 

[WTFMAN99]

MLB and NBA have luxury taxes

NFL has a hard cap but contracts aren't guaranteed like the NHL

I think it would be nice to either implement a luxury tax, dollar for dollar up to 5-10M so if NYR (as an example) want to spend an extra 10M above the salary cap ceiling, it costs them 20M with the extra 10M being split amongst the bottom 5-10 revenue teams.

Alternatively, I wouldn't mind just looking at net cap hits instead but the calculation would be a lot more tedious.

The spirit of the salary cap was to create parity but if some teams are getting benefits from income tax rates, it does throw off the competitive balance. Edmonton and Colorado are 2 teams that have gone deep without being a low/zero income tax province/state but Vegas, Tampa, Florida and Tampa have historically gone pretty deep somewhat frequently.

 

[Golden_Jet]

MLB and NBA have luxury taxes

NFL has a hard cap but contracts aren't guaranteed like the NHL

I think it would be nice to either implement a luxury tax, dollar for dollar up to 5-10M so if NYR (as an example) want to spend an extra 10M above the salary cap ceiling, it costs them 20M with the extra 10M being split amongst the bottom 5-10 revenue teams.

The extra 10 million is for the league side, to negate any extra escrow, if you want to give 10 million to the bottom revenue teams, then needs to be 30 million.

 

[dekelikekocur]

MLB and NBA have luxury taxes

NFL has a hard cap but contracts aren't guaranteed like the NHL

I think it would be nice to either implement a luxury tax, dollar for dollar up to 5-10M so if NYR (as an example) want to spend an extra 10M above the salary cap ceiling, it costs them 20M with the extra 10M being split amongst the bottom 5-10 revenue teams.

Alternatively, I wouldn't mind just looking at net cap hits instead but the calculation would be a lot more tedious.

The spirit of the salary cap was to create parity but if some teams are getting benefits from income tax rates, it does throw off the competitive balance. Edmonton and Colorado are 2 teams that have gone deep without being a low/zero income tax province/state but Vegas, Tampa, Florida and Tampa have historically gone pretty deep somewhat frequently.

That would be wrong, the purpose of the salary cap was to lock in ownership revenue at a specific % of HRR.

 

[WTFMAN99]

The extra 10 million is for the league side, to negate any extra escrow, if you want to give 10 million to the bottom revenue teams, then needs to be 30 million.

I was just looking at the NBA distribution;

When a team surpasses the luxury tax threshold and pays the fee, the money is subsequently redistributed to other teams with lower payrolls. In addition, some of the proceeds go toward funding league initiatives, including player benefits and veteran minimum contracts.

 

[Golden_Jet]

I was just looking at the NBA distribution;

When a team surpasses the luxury tax threshold and pays the fee, the money is subsequently redistributed to other teams with lower payrolls. In addition, some of the proceeds go toward funding league initiatives, including player benefits and veteran minimum contracts.

Ya it’s a different system, I was just pointing out unless the players want to pay more in escrow, the penalty needs to be higher.
I’d be ok with a 3x tax up to a certain % of the cap. ie. a team can spend up to 10% over.

Also the NHL has a distribution to lower payroll teams currently, about 30% of playoff revenue goes to lower revenue teams.

 

[WTFMAN99]

Ya it’s a different system, I was just pointing out unless the players want to pay more in escrow, the penalty needs to be higher.
I’d be ok with a 3x tax up to a certain % of the cap. ie. a team can spend up to 10% over.

Also the NHL has a distribution to lower payroll teams currently, about 30% of playoff revenue goes to lower revenue teams.

Yeah, I just think there is some kind of happy medium to find in all of this.

I don't think we've hit parity, not really with income tax differential by state/province so this kind of evens the playing field.

NFL is the only other hard cap league but they can basically release a player anytime so I think the NHL needs to look at a luxury tax.

 

[WhiskeyYerTheDevils]

MLB and NBA have luxury taxes

NFL has a hard cap but contracts aren't guaranteed like the NHL

I think it would be nice to either implement a luxury tax, dollar for dollar up to 5-10M so if NYR (as an example) want to spend an extra 10M above the salary cap ceiling, it costs them 20M with the extra 10M being split amongst the bottom 5-10 revenue teams.

Alternatively, I wouldn't mind just looking at net cap hits instead but the calculation would be a lot more tedious.

The spirit of the salary cap was to create parity but if some teams are getting benefits from income tax rates, it does throw off the competitive balance. Edmonton and Colorado are 2 teams that have gone deep without being a low/zero income tax province/state but Vegas, Tampa, Florida and Tampa have historically gone pretty deep somewhat frequently.

The cap was created to control costs. Parity is a nice side effect.

If you're gonna start controlling for region/team specific advantages, why stop at taxes? What about teams that have more budget for coaches, trainers, and scouts? What about teams with new facilities, or teams in major cities with a thriving nightlife? Or teams that can attract players just because of their history (like NYR and Toronto).

 

[WTFMAN99]

The cap was created to control costs. Parity is a nice side effect.

If you're gonna start controlling for region/team specific advantages, why stop at taxes? What about teams that have more budget for coaches, trainers, and scouts? What about teams with new facilities, or teams in major cities with a thriving nightlife? Or teams that can attract players just because of their history (like NYR and Toronto).

I'd say control the controllable.

If 5M isn't equal in Calgary and Nashville, we should try to make it as equal as possible, whether that be setting individual salary caps for each team or going by net cap hit per player.

Nashville can offer you anonymity but Calgary can't...but you can't really put that in an equation.

An older player may not care about the thriving night life but a younger guy could, again, hard to quantify.

I don't think you'll ever find a perfect solution either but it doesn't mean you shouldn't look for one.

 

[WhiskeyYerTheDevils]

I'd say control the controllable.

If 5M isn't equal in Calgary and Nashville, we should try to make it as equal as possible, whether that be setting individual salary caps for each team or going by net cap hit per player.

Nashville can offer you anonymity but Calgary can't...but you can't really put that in an equation.

An older player may not care about the thriving night life but a younger guy could, again, hard to quantify.

I don't think you'll ever find a perfect solution either but it doesn't mean you shouldn't look for one.

It's just as hard to quantify the effective tax differences, because there are so many factors specific for each player. And then there's the matter of normalizing for the extra government services offered in those high tax areas. Public transportation, parks, schools, hospitals...