An idea to remove the cap advantage for no tax states

[Beukeboom Fan]

Of course the Vegas fan thinks there's no problem with it...The problem is that it is SO obvious, Mr. Vegas imagine you were worth a $50 Million Dollar Contract, and 10 teams are lining up to sign you. You narrow it down to Dallas, Miami and Vancouver. Then you look at how much tax you will pay over those 5 years of the contract, and you see that (being extremely conservative) you will pay 10% more in Vancouver, a little 10 percent. Simple math, 10% of $50 Million is $5 Million, you will make $5 Million more dollars if you sign with Dallas or Florida. How does that affect your decision?

Come on, let's be realistic about this. Forget the weather, politics, price of housing (because that is an investment that goes up in value), and other petty little payments, this is about big time cash coming out of your pocket. And with an incredibly rigid salary cap where teams cannot exceed a paltry $90 Million, it's a huge detriment to certain teams.

The 20% tax rate in BC theoretically give you benefits for living there, correct? Much like the high taxes in the other major metropolitan areas are offset by non-financial benefits like culture and nightlife. If high costs markets like the Rangers, Kings or Maple Leafs ever struggled to sign/resign players, there might be a case.

That’s cool, I’ll take the word of GM’s over yours though

The poster you are quoting said at the beginning of his post that the taxes are an advantage, which I assume is what you are meaning here (recent Trotz quote). The point he was making is that tax is one many potential issues that is evaluated by players when making a decision on where to sign.

 

[x Tame Impala]

That’s cool, I’ll take the word of GM’s over yours though

It can't possibly be them posturing to alleviate some criticism, right? If a NHL GM honestly has no rebuttal to an agent saying "well my player will have to pay more in taxes so we want more money" then they aren't qualified to do their job. If a meathead like myself can understand income tax disparity isn't the end all be all, i'm sure that professional hockey executives have this figured out and then some.

You're not being objective here.

 

[JPT]

It can't possibly be them posturing to alleviate some criticism, right? If a NHL GM honestly has no rebuttal to an agent saying "well my player will have to pay more in taxes so we want more money" then they aren't qualified to do their job. If a meathead like myself can understand income tax disparity isn't the end all be all, i'm sure that professional hockey executives have this figured out and then some.

You're not being objective here.

The people who say things I like are telling the truth selflessly, and the people who say things I don't like are acting out of self interest. That's how it always seems to work out for some weird reason.

 

[x Tame Impala]

Of course the Vegas fan thinks there's no problem with it...The problem is that it is SO obvious, Mr. Vegas imagine you were worth a $50 Million Dollar Contract, and 10 teams are lining up to sign you. You narrow it down to Dallas, Miami and Vancouver. Then you look at how much tax you will pay over those 5 years of the contract, and you see that (being extremely conservative) you will pay 10% more in Vancouver, a little 10 percent. Simple math, 10% of $50 Million is $5 Million, you will make $5 Million more dollars if you sign with Dallas or Florida. How does that affect your decision?

Come on, let's be realistic about this. Forget the weather, politics, price of housing (because that is an investment that goes up in value), and other petty little payments, this is about big time cash coming out of your pocket. And with an incredibly rigid salary cap where teams cannot exceed a paltry $90 Million, it's a huge detriment to certain teams.

It's 115 degrees (F) in Vegas right now and people are cooking eggs on the sidewalk. No one is out at public pools or walking around or golfing or anything. Do you want to equalize that across the league too? A good/bad weather index?

Last post i'll make in this thread today (LOL), income tax isn't the only factor. Canadians are making it seem like it is. That's the issue. 31 pages of back and forth and it boils down to this...

Income tax differences between cities IS an advantage, BUT that advantage is overblown and there are many other advantages/disadvantages between cities that would also need to be equalized if the league were to adjust the salary cap for income tax.

 

[x Tame Impala]

Cost of living comparing Miami to Toronto...it's about 20% more expensive to live in Miami than in Toronto.

Cost of Living Comparison Between Miami, FL, United States And Toronto, Canada

www.numbeo.com

Miami vs Toronto comparison: Cost of Living, Prices, Salary

The cost of living in Miami, FL is 21% more expensive than in Toronto. Cities ranked 103rd and 656th ($3103 vs $2575) in the list of the most expensive cities in the world and ranked 80th and 5th in the United States and Canada, respectively.

livingcost.org

Cost of living comparing Tampa to Toronto...it's about 8% more expensive to live in Tampa than in Toronto

Cost of Living Comparison Between Tampa, FL, United States And Toronto, Canada

www.numbeo.com

The people who say things I like are telling the truth selflessly, and the people who say things I don't like are acting out of self interest. That's how it always seems to work out for some weird reason.

We're all guilty of that as human beings, to be fair.

 

[FiveTacos]

It's 115 degrees (F) in Vegas right now and people are cooking eggs on the sidewalk.

Holy crap, they don't pay income tax AND they don't have to pay for gas or electricity to cook? We need a pavement cooking equalizer cap adjustment, now!

 

[Viqsi]

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.

Cool. Since we seem to be totally okay with threads that presume the existence of nonexistent or marginal-at-best "problems" that are highlighted only to target particular groups out of a sense of jealousy and self-entitlement, I think my next thread will be about how we need to get rid of Canadian and O6 hockey fans entirely because some of them can be prone to hostile gatekeeping and this puts off potential other fans and prevents growing the game. And don't even get me started on the copium threads...

 

[triggrman]

Holy crap, they don't pay income tax AND they don't have to pay for gas or electricity to cook? We need a pavement cooking equalizer cap adjustment, now!

Thread closed!


Awesome quote.

 

[DaPhazz]

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

Dafuq did I just read lol.

36 pages later and still no evidence that the owners or players even consider this a problem.

and what about Nashville's GM?

 

[weastern bias]

Dafuq did I just read lol.

It made about as much sense as complaining that "hockey actually matters" in some markets rather than in others when the original complaint was ostensibly about tax rates

Taxes in California are comparable to taxes in Canada yet the Kings never have trouble attracting free agents at market value, especially when the team is really good, there are more factors that lead to players signing decisions than just taxes

 

[x Tame Impala]

Dafuq did I just read lol.



and what about Nashville's GM?

If the allure of these no income taxes is so high, why has Nashville had one great season in 26 years? They’ve always needed big name forwards to play for them and they’ve never got it.

Oh wow they signed 34 and 35 year old UFAs Stamkos and Marchessault. I’m sure they both went to Nashville to save a couple million in income tax.

 

[JPT]

Dafuq did I just read lol.



and what about Nashville's GM?

He said that it gives a "little bit of an advantage" in signing middle roster guys. So roleplayers.

 

[DaPhazz]

He said that it gives a "little bit of an advantage" in signing middle roster guys. So roleplayers.

So there's an advantage then?

If the allure of these no income taxes is so high, why has Nashville had one great season in 26 years? They’ve always needed big name forwards to play for them and they’ve never got it.

Oh wow they signed 34 and 35 year old UFAs Stamkos and Marchessault. I’m sure they both went to Nashville to save a couple million in income tax.

Imagine if the drafted properly.

 

[JPT]

So there's an advantage then?



Imagine if the drafted properly.

Omfg

For 37 pages those of us who don’t think there should be, or even is, a “fix” to the cap for this have said that it is an advantage. How many times do we have to repeat ourselves. There is an advantage, but not a big enough advantage to warrant an incredibly complex solution vis-a-vis cap adjustments that would require approval from the NHLPA for the league to access private financial and personal information from players.

Please go back and read any two pages of this thread so we don’t have to keep repeating ourselves. I f***ing beg you.

 

[LTIR Trickery]

Cost of living comparing Miami to Toronto...it's about 20% more expensive to live in Miami than in Toronto.

Cost of Living Comparison Between Miami, FL, United States And Toronto, Canada

www.numbeo.com

Miami vs Toronto comparison: Cost of Living, Prices, Salary

The cost of living in Miami, FL is 21% more expensive than in Toronto. Cities ranked 103rd and 656th ($3103 vs $2575) in the list of the most expensive cities in the world and ranked 80th and 5th in the United States and Canada, respectively.

livingcost.org

Cost of living comparing Tampa to Toronto...it's about 8% more expensive to live in Tampa than in Toronto

Cost of Living Comparison Between Tampa, FL, United States And Toronto, Canada

www.numbeo.com

We're all guilty of that as human beings, to be fair.

To be fair though I highly doubt the players are living in Miami proper, or South Beach for that matter. It'll be more like Luongo and his family, living in Parkland. In Tampas situation, using Tampa is fair, they're going to generally be in South Tampa because of the distance/layout/traffic/other players and families.

The gap in real estate these days still exists, but it is both much smaller, and you have to deal with crazy Florida problems like accelerating property values driving property taxes higher, and dealing with the disaster that is homeowners insurance in Florida, which is honestly killing everyone.

I guess what i'm also getting at is how they're comparing and how its "20% more" than Toronto - are we talking South Beach vs Downtown Toronto? We talking about the surrounding areas included (for TO, Markham, Pickering, Whitby; for Miami including Miami Beach, Key Biscane) or just staying in the proper downtowns?

I guess this is a shitty, long winded way to stay that real estate isn't the equalizer that it once was for southern teams, especially with all the Russians, Canadians, and upstate NY/Mass people moving down. Cost of living isn't really cheaper anymore.

 

[LTIR Trickery]

Omfg

For 37 pages those of us who don’t think there should be, or even is, a “fix” to the cap for this have said that it is an advantage. How many times do we have to repeat ourselves. There is an advantage, but not a big enough advantage to warrant an incredibly complex solution vis-a-vis cap adjustments that would require approval from the NHLPA for the league to access private financial and personal information from players.

Please go back and read and two pages of this thread so we don’t have to keep repeating ourselves. I f***ing beg you.

Not even just that, it changes too quickly and players are too transient to really, I think, get good enough data to make a proper decision that doesn't inadvertently shit on other teams or players too.

 

[Beukeboom Fan]

To be fair though I highly doubt the players are living in Miami proper, or South Beach for that matter. It'll be more like Luongo and his family, living in Parkland. In Tampas situation, using Tampa is fair, they're going to generally be in South Tampa because of the distance/layout/traffic/other players and families.

The gap in real estate these days still exists, but it is both much smaller, and you have to deal with crazy Florida problems like accelerating property values driving property taxes higher, and dealing with the disaster that is homeowners insurance in Florida, which is honestly killing everyone.

I guess what i'm also getting at is how they're comparing and how its "20% more" than Toronto - are we talking South Beach vs Downtown Toronto? We talking about the surrounding areas included (for TO, Markham, Pickering, Whitby; for Miami including Miami Beach, Key Biscane) or just staying in the proper downtowns?

I guess this is a shitty, long winded way to stay that real estate isn't the equalizer that it once was for southern teams, especially with all the Russians, Canadians, and upstate NY/Mass people moving down. Cost of living isn't really cheaper anymore.

To say this another way - there are ways to try and factor in adjustments to the cap to make it "fairer" (Taxes, COLA, endorsements, front-loaded contracts, etc.). With that said - it is incredibly difficult to quantify accurately and the NHL & NHLPA decided that the additional complexity is not worth the effort.

Do some markets have a tax advantage? Yes, but player's ability to utilize tax planning can mitigate signficantly, and there are HUGE differences on the same team, which make it impossible to accurately apply an "average rate" model for teams just based on local taxes. Should also be noted that this is only an issue for UFA years because teams aren't competing with other organizations during RFA eligible years.

Do some markets have a cost of living advantage? Theoretically they do, and it's very easy to quantify. Just not sure how the cost of living for Detroit is representative for Red Wing players who almost certainly don't live in DET proper. Should also be noted that players aren't spending 100% of the salary to live, so even if you have a 20% difference in cost of living between markets would not mean that you theoretically should give a team 20% more cap space to compensate.

Do some teams have a "culture" benefit? Sure - people have always seemed to want to play in certain markets. It ruins people case that these markets typically have both high taxes and costs of livings so that would lead you to believe that it is not an issue from a player's perspective.

 

[VivaLasVegas]

Of course the Vegas fan thinks there's no problem with it...The problem is that it is SO obvious, Mr. Vegas imagine you were worth a $50 Million Dollar Contract, and 10 teams are lining up to sign you. You narrow it down to Dallas, Miami and Vancouver. Then you look at how much tax you will pay over those 5 years of the contract, and you see that (being extremely conservative) you will pay 10% more in Vancouver, a little 10 percent. Simple math, 10% of $50 Million is $5 Million, you will make $5 Million more dollars if you sign with Dallas or Florida. How does that affect your decision?

Come on, let's be realistic about this. Forget the weather, politics, price of housing (because that is an investment that goes up in value), and other petty little payments, this is about big time cash coming out of your pocket. And with an incredibly rigid salary cap where teams cannot exceed a paltry $90 Million, it's a huge detriment to certain teams.

Never said anything like that, but was only noting that neither the owners or the NHLPA have indicated that they see it as an issue.

That posters say it *must be an issue because reasons* doesn't change this fact.

 

[Contenderorpretender]

Just add a luxury tax. Or get rid of the cap. Teams aren't supporting arizona anymore. No need for a cap system. Unless that dump of a city named Winnipeg needs help.

 

[Golden_Jet]

Just add a luxury tax. Or get rid of the cap. Teams aren't supporting arizona anymore. No need for a cap system. Unless that dump of a city named Winnipeg needs help.

Feel free to read the 30 pages, on some of the issues with a luxury tax.
anyone can type add a luxury tax, without thinking it through, how it affects both parties, how the 50/50 split gets resolved.
Bring some ideas ideas on implementation, to get both parties signing off.
The cap isn’t going anywhere, not to mention MLSE loves the cap, making more money than they ever did.
Before the cap, players were taking 70% of revenues.

 

[Contenderorpretender]

Feel free to read the 30 pages, on some of the issues with a luxury tax.
anyone can type add a luxury tax, without thinking it through, how it affects both parties, how the 50/50 split gets resolved.
Bring some ideas ideas on implementation, to get both parties signing off.
The cap isn’t going anywhere, not to mention MLSE loves the cap, making more money than they ever did.
Before the cap, players were taking 70% of revenues.

Just add a luxury tax

 

[Viqsi]

Just add a luxury tax

No.

 

[Contenderorpretender]

No.

Ok

 

[Craig Ludwig]

Never said anything like that, but was only noting that neither the owners or the NHLPA have indicated that they see it as an issue.

That posters say it *must be an issue because reasons* doesn't change this fact.

Fair, but it is being spoken more often on local radio and even by top NHL commentators like Hockey Night in Canada, whereas in the past it was more fodder on groups like these. I don;t think anything will ever happen but it has come to light lately.

 

[Crede777]

Excellent article on this topic from the Athletic.

Regardless of how a player may mitigate tax burden through accounting, it looks like teams in lower tax markets really emphasize the tax differences between them and higher tax markets:

When J.P. Barry negotiates for his clients with teams in markets with lower tax rates, that difference is always aggressively pointed out. Along with an offer, a team will provide breakdowns of what it would be like in a higher tax-rate and cost-of-living market like Toronto.

“They’re using it as a tactical advantage,” says Barry, managing director of CAA Hockey.

A breakdown of one accounting move that a player can make to try to mitigate taxes:

Many NHL contracts come with a fat bonus and a relatively small salary. In the upcoming season, for example, the Leafs’ Auston Matthews will earn a $15,925,000 bonus to go along with his $775,000 salary, according to Sportrac.

That bonus is a common structure for a professional athlete who is a resident of a lower tax jurisdiction in the U.S., says Kris Rossignoli, a partner at Cardinal Point Athlete Advisors who specializes in cross-border tax planning.

Additionally, it seems that Canada really wants to change the regulatory landscape so that athletes have greater difficulty avoiding paying Canadian taxes.

The second argument the CRA makes potentially has wider implications for pro athletes with similar deals.

Tavares’ contract specifies that his bonus is dependent on him playing games to the best of his ability, reporting to training camp, and keeping in good physical condition. If Tavares retires, withholds his services, or leaves the Leafs without consent, he breaches his contract and would be forced to repay a portion of the bonus.

Because the specific obligations Tavares has under the contract are performed during the season, the Canadian tax authority says that money is actually not an inducement to sign a contract — but rather a payment for services provided.

That puts a target on non-resident athletes playing in Canada who have similar bonus structures.

‘Anywhere but Canada’: How a tax ruling could hobble pro teams north of the border

The ruling on John Tavares' signing bonus could have far-reaching implications for future pros contemplating a deal with a Canadian team.

www.nytimes.com