An idea to remove the cap advantage for no tax states

[x Tame Impala]

You’re ski

Neat, they also only play 42 games at home per year. I know the differences aren't massive, but gm's are saying it has impact, so maybe even small percentage differences have an impact all the same...

Saying the difference isn't massive is also not the point.

You’re skirting the main rebuttal here. Taxes are not the only difference maker in a team’s ability to attract free agents and sign contracts. Yet that’s the only difference you want the league to equalize. It ignores weather, quality of life, cost of living, etc…

It’s an entirely superficial and mostly factually exaggerated factor.

 

[Beukeboom Fan]

But how is the a negative from a players perspective, not the owners. The thread is stating that the low tax rates is appeal for players when signing contracts. Why is it not the same for a playing getting paid in USD and spending CDN

It theoretically is an advantage for the players, but from listening to Canadians in this thread - I believe that the local prices already take that into account, So as an example if you buy a $10 paperback in the US it's already priced at $13 in Canada.

 

[TBF1972]

The wealthier teams can spend as much as they want- they can pour money into marketing, property and equipment, staff (scouting, development, etc), and numerous other things.

Meanwhile, the poorer teams are being forced to work harder, because there is a minimum spend requirement. In order to justify spending to the min, teams will need to be competitive to bring fans into the arenas and sell more merch, which will help drive revenue above and beyond spend on salary.

What the cap has done is allow franchises in smaller markets an opportunity to right the ship until they become more viable in their markets in a more sustainable way. And it’s prevented us from having to watch the same six franchises be prominent year in and year out, forcing them to finally work on spending smartly rather than just throwing piles of money wherever and hoping it sticks.


It’s not that simple. Players will get taxed more or less in a year based on the schedule of games they play. If you live in a tax-free state, you are still going to get taxed for the days you spent working/playing games in New Jersey, California, New York, Massachusetts, etc.

i would say the cap saves teams like the rangers and the leafs to continously fail the same way.

 

[JPT]

I only care because Habs and leafs can’t compete in free agency against a market they fund.

the salary cap should be based on net salaries, not gross.

Which players were those teams going to get if taxes weren't an issue?

 

[rojac]

Players file taxes in 20+ different states and provinces, how are you calculating LAF,
players on the same team can have different deductions.

My thoughts on calculating LAF.

The NHL and NHLPA would agree on a 23-player reference team, basically just a collection of 23 salaries that represent a fairly standard distribution of salaries on a NHL team.

For each NHL team, they would work out what it cost each "player" on this reference team to live in that market based on income taxes, sales taxes, property taxes, housing costs, etc. -- whatever the NHL and NHLPA decide to include.

I should note here that I envision the income tax for this reference teambeing calculated without productions. It would, however, take into account the affect of jock axes from the various locales where will pay in the upcoming season.

Once you have the total costs for this reference team to play in each NHL locale, you can find the average and use that as LFA 0%. The reference team costs for each locale would then be compared to the average to calculate the LFA for that locale. For example, if a locale had cod's that were 4% above average, that locale would have a LFA of +4% lf it was 2% below the average, the LFA would be -2%.

In any event, I always pictured this as a method for eliminating some but not all of the issues surrounding tax differences. It's not perfect but I suspect that an eventual solution put in place by the NHL and NHLPA will also be lacking in certain aspects.

 

[Golden_Jet]

I only care because Habs and leafs can’t compete in free agency against a market they fund.

the salary cap should be based on net salaries, not gross.

What, I guess you aren’t aware Matthews pays less tax than nearly most players in league, because of 95% signing bonus, and living in Arizona.
So sounds like you’re fine, removing signing bonus benefits.

lol @ net salary, obviously haven’t read the thread, or you’d realize players file taxes in 20+ different states and provinces, as just one example of issues.

 

[Golden_Jet]

My thoughts on calculating LAF.

The NHL and NHLPA would agree on a 23-player reference team, basically just a collection of 23 salaries that represent a fairly standard distribution of salaries on a NHL team.

For each NHL team, they would work out what it cost each "player" on this reference team to live in that market based on income taxes, sales taxes, property taxes, housing costs, etc. -- whatever the NHL and NHLPA decide to include.

I should note here that I envision the income tax for this reference teambeing calculated without productions. It would, however, take into account the affect of jock axes from the various locales where will pay in the upcoming season.

Once you have the total costs for this reference team to play in each NHL locale, you can find the average and use that as LFA 0%. The reference team costs for each locale would then be compared to the average to calculate the LFA for that locale. For example, if a locale had cod's that were 4% above average, that locale would have a LFA of +4% lf it was 2% below the average, the LFA would be -2%.

In any event, I always pictured this as a method for eliminating some but not all of the issues surrounding tax differences. It's not perfect but I suspect that an eventual solution put in place by the NHL and NHLPA will also be lacking in certain aspects.

You need to look at every player.
Look at signing bonuses for instance.
Matthews pays very little tax, compared to Marner, or compared to rest of league for that matter.
Since each player files taxes, in so many different jurisdictions, it’s becomes a nightmare.
Then you have trades etc

 

[Seras]

You’re ski

You’re skirting the main rebuttal here. Taxes are not the only difference maker in a team’s ability to attract free agents and sign contracts. Yet that’s the only difference you want the league to equalize. It ignores weather, quality of life, cost of living, etc…

It’s an entirely superficial and mostly factually exaggerated factor.

I can give you millions of examples why you are wrong and all of them in $ bills.

 

[Golden_Jet]

I can give you millions of examples why you are wrong and all of them in $ bills.

If I post something similar, I’ll take the million examples if I’m getting a $million .

 

[mouser]

Yes I’m aware.
Read the line above your bolded.
100% tax on the luxury overage.
If charge more than a 100% tax on luxury overage, that extra over 100% could go towards current escrow players pay.

So I’m saying if a team goes over cap by 5 million
Then a 5 million dollar tax to that team, to cover 50/50 split. (So costs team 10 million, to go over by 5 million)
The second part, was if the tax was more punitive, say $12 million total (5 for over + 7 in extra tax).
That extra 2 million coil be used towards the escrow the players are already paying.

Assessing a luxury tax against a team isn’t creating Hockey Related Revenue.

What you’re describing is using the luxury tax to break the 50/50 HRR split. So the players end up with more than 50% of HRR. Something that’s not going to be popular with the League.

 

[Golden_Jet]

Assessing a luxury tax against a team isn’t creating Hockey Related Revenue.

What you’re describing is using the luxury tax to break the 50/50 HRR split. So the players end up with more than 50% of HRR.

Keep the cap calculation the same as today, based on midpoint, to get the 85% (minimum cap) and the 115% (maximum cap) and a few other notables like benefits etc in calculation.

I’m saying if a soft cap gets implemented, ( some % number over the max cap allowed)
to use the additional luxury tax paid by a team, as a fund that goes back to owners.
team spends $5 million over the “max/115%) cap number. (88 million upcoming)
the team pays an additional $5 million, that goes into the soft cap overage fund say.

If fund for all 32 teams becomes $128 at the end of the year, even though might only be 10 teams using it.
Then all 32 teams gets $4 million at end of the year, regardless if they went over or not. It it’s obviously more of a penalty for the team going over, ( if you don’t want to include a team in the $4 million dividend, because they were one of the 10 teams going over. That would work as well, just a little more dividend for others.

Thought it as an option for those wanting a soft cap CBA. I’m fine with the way it is, just suggesting a way it could be implemented, that would possibly satisfy players and owners.

 

[rojac]

Please spend time understanding how to file tax returns with expense deductions before attempting any further form of this idea.

There's absolutely no way you can get LAF to work on hundreds of NHL players unless you controlled every aspect of their entire life a Tamagotchi. There's no way that anyone would agree to this. Maybe you could do this in the lower leagues at best, but even then, I think many may just refuse the idea. It's insanely invasive of someone's privacy.

That's not including the fact you've now introduced a far more complex bit of chaos when it comes to taxation. You'll need to understand stuff like taxable benefits, allowances, deductions, federal, state and provincial tax credits that not all players qualify for. It's a moving target every time you introduce a new factor.

Any basic idea attempting to address a "tax difference" is going to be ridiculously difficult to design to be fair and meet the intended solution, let alone implement.

Let me just say that I think any attempt to create a completely fair and perfectly balanced is patently absurd. That was not my goal here. My goal was to create a system that could reduce impact that things like taxes and cost of living could have on player decisions of where to play. I have no idea where you get the idea that I am trying to control

You need to look at every player.
Look at signing bonuses for instance.
Matthews pays very little tax, compared to Marner, or compared to rest of league for that matter.
Since each player files taxes, in so many different jurisdictions, it’s becomes a nightmare.
Then you have trades etc

If you're not looking to create a perfect solution but rather an approximate one, you do not need to look at every player.

I discussed signing bonuses in my original post.

When I discussed how I envisioned LAFs being calculated, I specifically mentioned that it included the various jock taxes for where a team would play.

Trades would work like this.

Let's say we have a player on Toronto who has a $7M cap hit and is making $5M in contract dollars for the current season with no signing bonus. Partway through the season, Toronto trades him to Tampa with no retention. While he was in Toronto, he would be paid biweekly based on $5.25M real dollars (because of Toronto's LAF of +5%). In Tampa, he would be paid biweekly based on $4.75M real dollars (because of Tampa Bay's LAF of -5%).

Now, let's say the Leafs retained 50% on the player. What they would be paying him from that point on, would be based on half of what the Tampa value of his contract is. So, basically, both Toronto and Tampa would be paying him biweekly based on $2.375M ($2.5M at Tampa's LAF). If Tampa then moved the player to Edmonton in the offseason, the amount paid for Toronto's 50% of his contract would then be based on Edmonton's LAF.

Note that nothing in here changes anything regarding the cap. The player continues to have a $7M cap hit although it could be split between Toronto/Tampa Bay or Toronto/Edmonton, but that's just standard retention. The only thing that changes is the real dollars the player receives in each of the cities.

 

[admiralcadillac]

You’re ski

You’re skirting the main rebuttal here. Taxes are not the only difference maker in a team’s ability to attract free agents and sign contracts. Yet that’s the only difference you want the league to equalize. It ignores weather, quality of life, cost of living, etc…

It’s an entirely superficial and mostly factually exaggerated factor.

How do you want to equalize the others?

 

[DaPhazz]

Or, just get over it

I live in an area with high income tax rates, free agents never sign with my team, it's not a big deal

Try living in an high taxed area where hockey matters for real. You'll get why

 

[x Tame Impala]

How do you want to equalize the others?

I don't think these factors need to be equalized. It certainly doesn't need to be addressed via the salary cap, income tax disparities included.

 

[Golden_Jet]

Let me just say that I think any attempt to create a completely fair and perfectly balanced is patently absurd. That was not my goal here. My goal was to create a system that could reduce impact that things like taxes and cost of living could have on player decisions of where to play. I have no idea where you get the idea that I am trying to control

If you're not looking to create a perfect solution but rather an approximate one, you do not need to look at every player.

I discussed signing bonuses in my original post.

When I discussed how I envisioned LAFs being calculated, I specifically mentioned that it included the various jock taxes for where a team would play.

Trades would work like this.

Let's say we have a player on Toronto who has a $7M cap hit and is making $5M in contract dollars for the current season with no signing bonus. Partway through the season, Toronto trades him to Tampa with no retention. While he was in Toronto, he would be paid biweekly based on $5.25M real dollars (because of Toronto's LAF of +5%). In Tampa, he would be paid biweekly based on $4.75M real dollars (because of Tampa Bay's LAF of -5%).

Now, let's say the Leafs retained 50% on the player. What they would be paying him from that point on, would be based on half of what the Tampa value of his contract is. So, basically, both Toronto and Tampa would be paying him biweekly based on $2.375M ($2.5M at Tampa's LAF). If Tampa then moved the player to Edmonton in the offseason, the amount paid for Toronto's 50% of his contract would then be based on Edmonton's LAF.

Note that nothing in here changes anything regarding the cap. The player continues to have a $7M cap hit although it could be split between Toronto/Tampa Bay or Toronto/Edmonton, but that's just standard retention. The only thing that changes is the real dollars the player receives in each of the cities.

I didn’t find the signing bonus part, but maybe I missed it.
What about ELC performance bonuses,
That sometimes become overages the next year.

What happens when a player says he paid more to LAF than IRA/CRA want at end of year.

Let me just say that I think any attempt to create a completely fair and perfectly balanced is patently absurd. That was not my goal here. My goal was to create a system that could reduce impact that things like taxes and cost of living could have on player decisions of where to play. I have no idea where you get the idea that I am trying to control

If you're not looking to create a perfect solution but rather an approximate one, you do not need to look at every player.

I discussed signing bonuses in my original post.

When I discussed how I envisioned LAFs being calculated, I specifically mentioned that it included the various jock taxes for where a team would play.

Trades would work like this.

Let's say we have a player on Toronto who has a $7M cap hit and is making $5M in contract dollars for the current season with no signing bonus. Partway through the season, Toronto trades him to Tampa with no retention. While he was in Toronto, he would be paid biweekly based on $5.25M real dollars (because of Toronto's LAF of +5%). In Tampa, he would be paid biweekly based on $4.75M real dollars (because of Tampa Bay's LAF of -5%).

Now, let's say the Leafs retained 50% on the player. What they would be paying him from that point on, would be based on half of what the Tampa value of his contract is. So, basically, both Toronto and Tampa would be paying him biweekly based on $2.375M ($2.5M at Tampa's LAF). If Tampa then moved the player to Edmonton in the offseason, the amount paid for Toronto's 50% of his contract would then be based on Edmonton's LAF.

Note that nothing in here changes anything regarding the cap. The player continues to have a $7M cap hit although it could be split between Toronto/Tampa Bay or Toronto/Edmonton, but that's just standard retention. The only thing that changes is the real dollars the player receives in each of the cities.

I’ve lost track now if it’s called LAF or LFA , after post 855 and on, they seem to be interchangeable, depends on the post.

 

[cowboy82nd]

You're trying to boil this down to a binary conversation.

Tax Free teams win.. Non tax free teams lose.

Nobody is making that argument that I've seen. So stop trying to twist it that way.

Winning and Losing at the NHL level is insanely complicated. It's not just Tax Free. It's not just Management. It's not just Destination. It's not just scouting, Coaching, etc. It's ALL of them and more.

But if you think Tax Free has 0 impact on a teams success. Then I completely disagree with you.

Just as Southern Market teams enjoy destination/anonymity advantages.

Take a look at NTC and NMC and try telling me that it's not an advantage to not be on any of them.

A teams ability to draw free agents and trade for players with NMC/NTC is sizeable advantage. That is the point I'm trying to make. Tax free helps in those regards.

So, because players put teams like Toronto on their NMC/NTC lists the NHL should do something about the media in those areas?

 

[FiveTacos]

I don't think these factors need to be equalized. It certainly doesn't need to be addressed via the salary cap, income tax disparities included.

Why shouldn't cost of living be addressed? It's quantifiable, and to a certain degree more quantifiable than income tax, as regardless of funny income tax shenanigans (like Matthews) players presumably live in the market they play in. And they ain't living in the cheap neighborhoods.

If the argument is that players will choose no income tax markets because it results in them banking more money, that exact same argument applies to places where it can cost much more to live, since having to spend several times more on housing has a direct impact on a player's finances as well.

If you're arguing to fix one while dismissing the other then you're not really interested in fairness. Or you're completely unaware of just how expensive it is to live in some of these places.

 

[weastern bias]

Try living in an high taxed area where hockey matters for real. You'll get why

Sounds like a real serious problem and not just some sad, cringe cope to excuse poor management and dismiss an unideal media environment

 

[admiralcadillac]

I don't think these factors need to be equalized. It certainly doesn't need to be addressed via the salary cap, income tax disparities included.

That's certainly an opinion that betrays your position. Others disagree so any factor that might help balance things and can be addressed is the point of this discussion, not whether other factors can also come into play.

 

[JPT]

Why shouldn't cost of living be addressed? It's quantifiable, and to a certain degree more quantifiable than income tax, as regardless of funny income tax shenanigans (like Matthews) players presumably live in the market they play in. And they ain't living in the cheap neighborhoods.

If the argument is that players will choose no income tax markets because it results in them banking more money, that exact same argument applies to places where it can cost much more to live, since having to spend several times more on housing has a direct impact on a player's finances as well.

If you're arguing to fix one while dismissing the other then you're not really interested in fairness. Or you're completely unaware of just how expensive it is to live in some of these places.

They don't *have* to live in the most expensive areas, do they? There are expenses that a person simply cannot avoid, but you're talking about people who make very high six figures or more. They can make choices that either save or cost them more money. There shouldn't be cap relief just because a player wants to live in a $4m home in an area where everything is more expensive because everyone around is rich. That's absurd.

Sounds like a real serious problem and not just some sad, cringe cope to excuse poor management and dismiss an unideal media environment

Yeah but have you ever tried taking something that is supposed to be entertainment so seriously that it influences your day-to-day life? I didn't think so.

 

[Caps8112]

Kinda funny how no one cared when Fla was losing 50 games a year for 30 years. Lightning have mostly been good for the 30 years but they had a few down years too and how many notable free agents turned down the rest of the league to sign in either of these places

 

[LOFIN]

Kinda funny how no one cared when Fla was losing 50 games a year for 30 years. Lightning have mostly been good for the 30 years but they had a few down years too and how many notable free agents turned down the rest of the league to sign in either of these places

Also funny how Edmonton got a few nice deals done (Arvidson, re-signing Henrique) during free agency, despite what we all hear about the pressure in Canadian cities, taxation (albeit it's less in Alberta than elsewhere in Canada), horrible weather and boring city. But you know what? They are seen as a top contender. Funny how that turns out to be attractive to players.

 

[tucker3434]

How do you want to equalize the others?

Cost of living would be no more difficult than adjusting for taxes. It's money out of players' pockets that they have to use on expenses and don't have the opportunity to save/invest/whatever. It should receive equal consideration here, but doesn't. Because the cost of living in Canada is generally cheaper than major US cities by every metric I can find, likely a result of the current exchange rate. Players are paid in USD. Advantage, Canada.

 

[weastern bias]

Yeah but have you ever tried taking something that is supposed to be entertainment so seriously that it influences your day-to-day life? I didn't think so.

Me? A poster on HF boards? Never! lol