An idea to remove the cap advantage for no tax states

[Golden_Jet]

Want the cap to go up? Move teams to major markets .

If you wanted that 5-10-20 years ago, you wouldn’t have a team, since were only playing in front of family and friends back then. 7 Canadian teams bring in around 1/3 of the revenue for the league.

Obviously your not very knowledgeable on the business side of the sport.
Edmonton have the second most revenue, in 22/23 in the league,

This years numbers aren’t out.
Possibly this was a joke post, but I doubt it, just uninformed likely.

 

[SullivanT]

Just have a salary cap that varies by regional tax % states with no tax will be the baseline they remain to use the cap as normal but in say Colorado where tax is 4.4% allow them to go 4.4% over the cap or in canada where it's like 15-20% depending on the province allow teams to jsut go over cap the percentage they pay more in taxes. As it stands right now not only is a location a big handicap for Canadian teams (who wouldn't want to live on a beach somewhere where noone even knows who you are) as well as having a 15-20% tax handicap on top of that. It's like I could go to Canada make 10 million be a celebrity where everyone knows who you are everywhere you go and live in winter for half the year. Ooorr I can go to Florida make 8 mill but still make the same amount as if I was making 10 in Canada or even less just to have that comfort of living in Florida and just be a regular dude walking around with this big cup thing at the beach and everyone just thinks you are some homeless guy hualing around a shiney chunk of metal like a crazy person, on top of that the team has a better chance of doing well because of these reasons

 

[BigEezyE22]

What you save in taxes in Florida, they spend in air conditioning

 

[Beukeboom Fan]

This is not the gotcha people brining it up think it is. Taxes distort NHL income, cost of living doesn’t.

How about amounts earned from endorsements?

 

[Sypher04]

How about amounts earned from endorsements?

No. Endorsements are money earned from work outside of NHL responsibilities. They are not NHL income.

 

[JPT]

No. Endorsements are money earned from work outside of NHL responsibilities. They are not NHL income.

So endorsement opportunities don't give some markets an advantage over others?

 

[Sypher04]

So endorsement opportunities don't give some markets an advantage over others?

Never said they don’t. The fact remains however that endorsement money is earned from outside work, and not NHL income. So making cap adjustments for endorsements makes zero sense.

There are a multitude of reasons why players may choose one location over another. None other than taxation have a tangible and quantifiable impact on NHL AAV.

That isn’t to say every deal in a tax free state is a bargain, team quality also matters, and yes some players also choose to leave money on the table in any number of cities, tax and tax-free alike.

 

[Beukeboom Fan]

No. Endorsements are money earned from work outside of NHL responsibilities. They are not NHL income.

But the opportunities vary by market and are opportunities derived from a players stardom in the NHL. BTW, IMO they should put this in with all the other non-material factors and exclude all from the cap.

AFAIK, no one on the "post tax" side has addressed that this only impacts UFA years, and the fact that players with essentially identical contracts on the same team have very different tax treatments. Much like how you conclude that endorsements are outside NHL responsibilities, so is tax planning.

No. Endorsements are money earned from work outside of NHL responsibilities. They are not NHL income.

Then why would the Maple Leafs bring a potential endorser to a contract negotiation meeting?

 

[Viqsi]

But the opportunities vary by market and are opportunities derived from a players stardom in the NHL. BTW, IMO they should put this in with all the other non-material factors and exclude all from the cap.

AFAIK, no one on the "post tax" side has addressed that this only impacts UFA years, and the fact that players with essentially identical contracts on the same team have very different tax treatments. Much like how you conclude that endorsements are outside NHL responsibilities, so is tax planning.

This suggests that the real approach is to have cap adjustments for signing players with particular agents who aren't good at advising their clients on tax prep.

 

[JPT]

Never said they don’t. The fact remains however that endorsement money is earned from outside work, and not NHL income. So making cap adjustments for endorsements makes zero sense.

There are a multitude of reasons why players may choose one location over another. None other than taxation have a tangible and quantifiable impact on NHL AAV.

That isn’t to say every deal in a tax free state is a bargain, team quality also matters, and yes some players also choose to leave money on the table in any number of cities, tax and tax-free alike.

Can you go ahead and quantify it, and show the actual impact it has on team success? It would need to have an impact on team success for there to be a need for a fix.

 

[Sypher04]

But the opportunities vary by market and are opportunities derived from a players stardom in the NHL. BTW, IMO they should put this in with all the other non-material factors and exclude all from the cap.

AFAIK, no one on the "post tax" side has addressed that this only impacts UFA years, and the fact that players with essentially identical contracts on the same team have very different tax treatments. Much like how you conclude that endorsements are outside NHL responsibilities, so is tax planning.


Then why would the Maple Leafs bring a potential endorser to a contract negotiation meeting?

Net income from NHL work is NHL tax home pay. Endorsements are separate. They are not the same. No amount of tax planning will close the gap in taxation.

As for the Stamkos negotiation. The Leafs offered him over $10M per and brought a rep to talk about endorsements he could be looking at and he still chose to sign for like $8.5M in the no tax state, that should tell you pretty well everything you need to know.

 

[Sypher04]

Can you go ahead and quantify it, and show the actual impact it has on team success? It would need to have an impact on team success for there to be a need for a fix.

I said it’s quantifiable which it is. I never claimed I specifically was qualified to do it.

If you don’t think so many of the last several finals teams (and winners) being from no tax states is telling, especially so when there are so few qualifying teams, that would frankly be naive.

 

[JPT]

I said it’s quantifiable which it is. I never claimed I specifically was qualified to do it.

If you don’t think so many of the last several finals teams (and winners) being from no tax states is telling, especially so when there are so few qualifying teams, that would frankly be naive.

Why is it those teams weren't winning a few years after the cap went into place if the state income tax thing is such a competitive edge? Could it be that sports are cyclical?

Net income from NHL work is NHL tax home pay. Endorsements are separate. They are not the same. No amount of tax planning will close the gap in taxation.

As for the Stamkos negotiation. The Leafs offered him over $10M per and brought a rep to talk about endorsements he could be looking at and he still chose to sign for like $8.5M in the no tax state, that should tell you pretty well everything you need to know.

That he didn't want to play in Toronto? Because I can guarantee you that he isn't making more in Nashville when you include endorsement opportunities.

 

[Golden_Jet]

Never said they don’t. The fact remains however that endorsement money is earned from outside work, and not NHL income. So making cap adjustments for endorsements makes zero sense.

There are a multitude of reasons why players may choose one location over another. None other than taxation have a tangible and quantifiable impact on NHL AAV.

That isn’t to say every deal in a tax free state is a bargain, team quality also matters, and yes some players also choose to leave money on the table in any number of cities, tax and tax-free alike.

What about signing bonuses, should they be eliminated, as it allows Matthews to pay less tax than a non tax state.

 

[JianYang]

Just have a salary cap that varies by regional tax % states with no tax will be the baseline they remain to use the cap as normal but in say Colorado where tax is 4.4% allow them to go 4.4% over the cap or in canada where it's like 15-20% depending on the province allow teams to jsut go over cap the percentage they pay more in taxes. As it stands right now not only is a location a big handicap for Canadian teams (who wouldn't want to live on a beach somewhere where noone even knows who you are) as well as having a 15-20% tax handicap on top of that. It's like I could go to Canada make 10 million be a celebrity where everyone knows who you are everywhere you go and live in winter for half the year. Ooorr I can go to Florida make 8 mill but still make the same amount as if I was making 10 in Canada or even less just to have that comfort of living in Florida and just be a regular dude walking around with this big cup thing at the beach and everyone just thinks you are some homeless guy hualing around a shiney chunk of metal like a crazy person, on top of that the team has a better chance of doing well because of these reasons

The issue with this is that the players aren't paying the same rates. For example, matthews is essentially paying the same tax as he would if he played for the coyotes while playing in toronto.

And its all a slippery slope. Where do we draw the line on competitive advantages? Are we going to set up a formula for weather, scrutiny, and city offerings too?

it's never going to be an equal game, and professional sports never has been that way.

 

[Sypher04]

Why is it those teams weren't winning a few years after the cap went into place if the state income tax thing is such a competitive edge? Could it be that sports are cyclical?

That he didn't want to play in Toronto? Because I can guarantee you that he isn't making more in Nashville when you include endorsement opportunities.

as I’ve said a thousand times on this subject. Nobody is saying tax-free = every contract gets signed for less. As the quality of the team increases and they become more of a destination the benefit of being tax free for free agent signings and extensions increases.

A bad team is still a bad team, tax or no tax.

A team like Tampa is still full marks for drafting, developing, building their program and ultimately winning. Ive never used it as a means to devalue their accomplishments. My only position is being able to get a savings on so many key players is a huge benefit to managing the cap and your depth at the peak of your window being open.

Anyway, I don’t care enough to continue to debating this today. Got places to be. Enjoy your Sunday

 

[JPT]

Sounds like some teams just need to be better at managing their cap space.

How would a team like Toronto be impacted by cap changes when they have Matthews not paying state income tax on bonuses but other players paying provincial taxes on theirs? Is the fix going to be applied to individual players since everyone will have different tax liabilities and deductions? How are trades going to be impacted since a player's schedule changes instantly and away games will all have different tax amounts.

There isn't enough of an advantage for the complex (maybe impossible) solution. It isn't that big of a problem. Fans of mismanaged teams need to accept reality.

 

[Viqsi]

I said it’s quantifiable which it is. I never claimed I specifically was qualified to do it.

...and yet you still feel perfectly qualified to assert the magnitude of its impact. Despite having no emprical way of actually measuring that impact.

 

[Sypher04]

...and yet you still feel perfectly qualified to assert the magnitude of its impact. Despite having no emprical way of actually measuring that impact.

Right. I forgot, I’m surrounded by a bunch of tax experts here. It’s not all like they are sharing their opinions as well based on what we’ve read on this subject.

At least I’m not pretending I know the answer.

And I never at any point in this thread once asserted that I know the magnitude of its impact.

 

[JPT]

There is no answer lol. It's not an issue worth the complexity of any fix.

 

[Viqsi]

Right. I forgot, I’m surrounded by a bunch of tax experts here. It’s not all like they are sharing their opinions as well based on what we’ve read on this subject.

Your logical fallacy is burden of proof

You said that the burden of proof lies not with the person making the claim, but with someone else to disprove.

yourlogicalfallacyis.com

You're the one advocating for overturning the status quo.

 

[Sypher04]

Your logical fallacy is burden of proof

You said that the burden of proof lies not with the person making the claim, but with someone else to disprove.

yourlogicalfallacyis.com

Good try, but no.
There are players and management people around the NHL that have openly acknowledged it as a benefit.

It may not be as big of an issue as some think and it may be too complicated to truly do anything about even if they had an appetite, but I feel comfortable in saying it’s real at some level.

I’m just not qualified, nor is anyone else here most likely for that matter, to say how much.

 

[Viqsi]

Good try, but no.
There are players and management people around the NHL that have openly acknowledged it as a benefit.

It may not be as big of an issue as some think and it may be too complicated to truly do anything about even if they had an appetite, but I feel comfortable in saying it’s real.

The bolded is why you were being asked to quantify. Which you dismissed as not doable, preferring instead to keep going on about how all these other things were clearly nonissues.

 

[Golden_Jet]

Good try, but no.
There are players and management people around the NHL that have openly acknowledged it as a benefit.

It may not be as big of an issue as some think and it may be too complicated to truly do anything about even if they had an appetite, but I feel comfortable in saying it’s real.

Yep just like you should be comfortable removing signing bonus benefit, that allows Matthews to pay less tax, than a non tax state.

 

[Sypher04]

Yep just like you should be comfortable removing signing bonus benefit, that allows Matthews to pay less tax, than a non tax state.

I have no issue with removing signing bonuses. Makes sense to me