An idea to remove the cap advantage for no tax states

[bigbadbruins1]

While it certainly has implications on some, I don't believe players put as much weight into taxes as we think. Its not like they are exempt from Federal income tax, Social security, medicare, escrow, etc. so while yes, some states have no income tax, realistically they save ~5% or less on their deal by going to a tax free state. So if someone signs a 1 year, 4 million dollar deal they will keep a whole 200k extra by going to Florida or LV. Now if you are talking California or NJ, yeah its a big chunk of change since they are 13.3% and 10.8% respectively, so much more than average income taxes.

 

[Golden_Jet]

And I am not even gonna glance through every post but I doubt that contract structure has been mentioned enough.

Yea I am not going to sift through 31 pages

lol, that’s because you didn’t read it, obviously.
Ya bonuses have been mentioned loads.

It’s like the posters that’s say, hey I haven’t read thread, but what about just go by take home pay.

 

[JPT]

While it certainly has implications on some, I don't believe players put as much weight into taxes as we think. Its not like they are exempt from Federal income tax, Social security, medicare, escrow, etc. so while yes, some states have no income tax, realistically they save ~5% or less on their deal by going to a tax free state. So if someone signs a 1 year, 4 million dollar deal they will keep a whole 200k extra by going to Florida or LV. Now if you are talking California or NJ, yeah its a big chunk of change since they are 13.3% and 10.8% respectively, so much more than average income taxes.

Not to mention sales and property taxes are generally higher in the areas of these no-income-tax states where the players will be living. Plus, housing costs in Williamson County, TN, where a lot of professional athletes live, are comparable to housing costs in the Bay Area. Of course, they don't have to live in that area, but it's where the best schools and all around best living conditions are.

 

[BrokenFace]

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.

I agree with you completely that winning and losing comes down to many factors and never just one. That's exactly why I strongly disagree with adjusting the salary cap for local taxes while ignoring the many other factors that can make a franchise successful. I'm actually fine with adjusting the cap for local taxes as long as we also adjust it for every other disadvantage a team can have, I just think that's an impossible task.

If the cap is adjusted for taxes, why not adjust it for the extra travel teams in the West have to deal with? Or why not adjust the cap for teams who get especially lucky or unlucky with the draft lottery?

 

[Craig Ludwig]

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.

Very well said.

 

[Lacaar]

I agree with you completely that winning and losing comes down to many factors and never just one. That's exactly why I strongly disagree with adjusting the salary cap for local taxes while ignoring the many other factors that can make a franchise successful. I'm actually fine with adjusting the cap for local taxes as long as we also adjust it for every other disadvantage a team can have, I just think that's an impossible task.

If the cap is adjusted for taxes, why not adjust it for the extra travel teams in the West have to deal with? Or why not adjust the cap for teams who get especially lucky or unlucky with the draft lottery?

Yah I doubt there's anything that will be done about it. Unless the current trend continues. Tax Free teams have been insanely successful the last few years. Would be fun to discuss why that is. Perhaps just coincidence etc. Perhaps players are realizing how much they actually make more playing there. Who knows.

But as to the original posters idea. I don't think it will happen because.

1. The tax free markets are markets the NHL is drooling over for potential growth. These are the darling markets of the NHL in terms of potential new fans. There's nothing the NHL wants more than to see these teams successful.
2. Canada hasn't won in 30+ years and still watches. There's little room for growth and Canada watches win or lose.

We all talk about fairness and all that crap. But I think we need to realize that no.. the league isn't fair. The distribution of free agents isn't fair. Guess what.. it's not fair in pretty much every other league either (honestly I don't follow many other sports but I doubt it is either.)

Why? Because money trumps fair. It does with the current owners.. it would if I was an owner
Fair in itself is really an impossible goal to be honest anyways.

To understand the league and it's policies you need only understand the need for constant growth. Northern hockey markets are tapped out. Hence no Quebec.. and Arizona take two is just a matter of time.

 

[Golden_Jet]

Tax Free teams have been insanely successful the last few years. Would be fun to discuss why that is.

crap no, it’s been discussed ad nauseum in here.
But if you want to read about it, there’s plenty in the thread to read.

 

[TheOne]

Not sure where you got the Leafs core 4 from his post. Maybe try to stay on topic?

Because it's only ever leaf fans crying about it. Every other high tax market can attract and retain players, and find post-season success. But go on being victims, I guess. Or blame Bettman some more.

 

[Sabresruletheschool]

Every market has pros and cons. Fixing this one is about as easy as giving Nashville a beach. Neither are going to happen.

Take Buffalo for example. The cons are you get some of the highest taxes in the country. The pros are you get to live in Buffalo!

 

[Sabresruletheschool]

While it certainly has implications on some, I don't believe players put as much weight into taxes as we think. Its not like they are exempt from Federal income tax, Social security, medicare, escrow, etc. so while yes, some states have no income tax, realistically they save ~5% or less on their deal by going to a tax free state. So if someone signs a 1 year, 4 million dollar deal they will keep a whole 200k extra by going to Florida or LV. Now if you are talking California or NJ, yeah its a big chunk of change since they are 13.3% and 10.8% respectively, so much more than average income taxes.

Sam Reinhart will save over $4 million on his eighy year contract playing for Florida instead of Buffalo.

 

[Gregor Samsa]

Get rid of the teams that are in those states. Simple as

 

[Golden_Jet]

Sam Reinhart will save over $4 million on his eighy year contract playing for Florida instead of Buffalo.

Wow, that’s quick calculations for you, congrats.
Since he files taxes in over 20+ states and provinces, each year.
could be in the ballpark, but not sure.

 

[CloudYeller]

Seems a lot of you are completely oblivious to the concept of tax burden, unless it's already buried twenty pages ago.

Tax Burden by State in 2024

Tax Burden by State in 2024

wallethub.com

5% difference from top to bottom.

"Well, I have a $4,000,000 offer from the New York Rangers and $4,000,000 offer from Seattle and Washington's taxes are FOUR WHOLE PERCENT lower overall so instead of playing for the team that's making deep playoff runs I'm going to play in Seattle! No, my agent didn't explain to me how media market can change endorsement deals."

It's asinine to think anyone is making a decision based on their goddamn taxes unless they're either a complete idiot (Probable. See: Aaron Rodgers.) or are dealing with an international tax situation.

Taxes are probably the 294th thing most players think about, far behind much more important things like "Do I really want to move again?" or "How do I tell my kids they they're losing their friends for the third time in six years?" and "What is the proximity of the arena to the nearest strip club?"

 

[Viqsi]

Yah I doubt there's anything that will be done about it. Unless the current trend continues. Tax Free teams have been insanely successful the last few years. Would be fun to discuss why that is. Perhaps just coincidence etc. Perhaps players are realizing how much they actually make more playing there. Who knows.

https://yourbias.is/the-availability-heuristic

 

[Catscountry40]

How about we compare Edmonton and Florida's attendance and tv viewership over the past 10 years. Or 20 years. Or since Florida's inception. Your team has really only been relevant for 15min and you're now suggesting other teams move to help increase attendance/viewership. Brilliant. Your team has been a joke for most of it's existence and has finally had a small run of success, and you decide now's the time to chirp about where teams should be located. Last season you were finally top 10 in attendance (still behind Edmonton of course), but the year before Florida had the 7th worst attendance. Sounds like bandwagon fans. What happens if Florida stats to slip again? Maybe we can move them to Houston. We know the success the Florida Marlins has been. Even the Dolphins are low on the attendance charts. Just not a great sports market I suppose.

The whole argument of "bandwagon'' is dumb. Edmonton fans are not better than anyone else.

You have just had a team longer.

Yes the Panthers struggled for years , but if Edmonton went 20 years without a series win I would bet anything they would see multiple empty seats. Even with absolute anything shit else to do in that city.

Major markets over time can pass Edmonton, but in couple generations a city like Vegas or South Florida does wayyyyyy more for the NHL than Edmonton.

Edmonton is capped.

People said the same stuff about the Heat, but now they Arte one of the top organizations and brands in the NBA.

 

[TheFinalWord]

The whole argument of "bandwagon'' is dumb. Edmonton fans are not better than anyone else.

You have just had a team longer.

Yes the Panthers struggled for years , but if Edmonton went 20 years without a series win I would bet anything they would see multiple empty seats. Even with absolute anything shit else to do in that city.

Major markets over time can pass Edmonton, but in couple generations a city like Vegas or South Florida does wayyyyyy more for the NHL than Edmonton.

Edmonton is capped.

People said the same stuff about the Heat, but now they Arte one of the top organizations and brands in the NBA.

Congrats. You're talking about potential. And yes, larger metro areas have more potential. And in a couple of generations, cities like Vegas could do more for the NHL than Edmonton. Or perhaps they fail. There's a reason Florida has been in the league for 30 years and has done very little for hockey in the area. I'm sure there are a lot of reasons, including team ownership/management, other entertainment, demographics, etc.. Florida had a good year attendance wise, but this is an anomaly, not the norm. Can Florida keep it going? We'll see. But for a fan of Florida to come and dump on other teams that have done better (attendance/tv viewership) than their team is pretty juvenile. You're not special yet.

 

[Sabresruletheschool]

Wow, that’s quick calculations for you, congrats.
Since he files taxes in over 20+ states and provinces, each year.
could be in the ballpark, but not sure.

That's not from me. Watched someone else figure it out lol.

 

[Snotbubbles]

Soft cap issue. The most competitive leagues are the NFL and NHL. Why? Hard cap. TSN and Sportsnet have pushed a narrative that it's because of taxes, because the other reality is that their teams have had shit management for decades and that's it's entirely their own faults for not winning cups.

The NFL doesn't have guaranteed contracts and a players cap hit can be manipulated by using signing bonus, roster bonuses, void years, restructures. Plus, they allow you to move unused cap space to the next year. If you consider the NFL as a hard cap, it could sure use some viagra because their cap is easily manipulated.

 

[Jumptheshark]

NHL wont penalize teams for something they have .no control over. How about Canadians Taxes for US Taxes. Or Quebec taxes vs US and the rest of Canada tax rates?

 

[WhiskeyYerTheDevils]

Here's an idea:

Have all teams structure their contract payments as such:

If the parties agree to a $10M annual salary, structure per the following rate table:
- $100 per home game (41) = $4,100
- $243,802 per road game (41) = $9,995,900

Something to that effect, with individual checks paid out for each game. Reconcile any potential imbalances at the end of the season in the form of end of season bonuses, using escrow where necessary.

If all teams adopted such a model, the local jurisdiction shouldn't have any qualms, as they get the extra taxes from their road games.

And we can finally stop all the whining.

 

[JAK]

Here's an idea:

Have all teams structure their contract payments as such:

If the parties agree to a $10M annual salary, structure per the following rate table:
- $100 per home game (41) = $4,100
- $243,802 per road game (41) = $9,995,900

Something to that effect, with individual checks paid out for each game. Reconcile any potential imbalances at the end of the season in the form of end of season bonuses, using escrow where necessary.

If all teams adopted such a model, the local jurisdiction shouldn't have any qualms, as they get the extra taxes from their road games.

And we can finally stop all the whining.

Arguably the worst idea I've heard yet.

 

[T REX]

The NFL doesn't have guaranteed contracts and a players cap hit can be manipulated by using signing bonus, roster bonuses, void years, restructures. Plus, they allow you to move unused cap space to the next year. If you consider the NFL as a hard cap, it could sure use some viagra because their cap is easily manipulated.

While you are not wrong...I can tell you that you can only do so much re-structuring before it catches up to you.

I think my Bucs had $81.5 mill in dead money. I think we had the most rookies in the NFL last year as a result.

At some point, that bill becomes due.

 

[WhiskeyYerTheDevils]

Arguably the worst idea I've heard yet.

I'm curious, what is your biggest issue with it?

 

[Jeremy2020]

I have some solutions in search a problem too.

 

[JAK]

I'm curious, what is your biggest issue with it?

Each game not being worth the same salary means injuries and call ups will affect total pay.

Good luck getting the NHLPA to agree to that.

NHL players who have an agent worth their salary will have accountants available that can completely minimalize the tax differences.

The issue is overblown because fans on the internet wants something to beat the dead horse with.