Fix the income tax debate

[Beukeboom Fan]

What do you do with this escrow account?

Would you be favour of also eliminating signing bonus that allow players to pay lower jock taxes and invest because tgey get their cash earlier.

Starting in September new CBA limits signing bonus to 60% of contract value, which will help reduce the no-tax benefit some.

 

[ottawa]

Cherry picked stats do. You're talking about 3 good teams, two of which went the better part of the previous decade without any success.

Hurricanes just won the cup in historically dominant fashion while spending far less than the cap.

See my edited post about the Hurricanes. They're in the bottom 10 in taxes which still makes a big $ impact. It's nice they spent below cap is nice but doesn't address the root cause.

It's easier to attract players when you can sell players on taking home more money.

The question is simple, would you rather make more money or make less money? Most will want to make more money.

Then there's the factor of winning as well. People say Canadian teams are mismanaged, but they have to spend more or offer longer contracts or NMCs to attract talent due to higher taxes, shittier weather, media, etc. which all contributes to some high tax teams not winning.

Again, go back and look at my edited post...the odds of a no-tax or low-tax team going to the finals and winning is a hell of a lot higher which is for some reason a lot of people want to ignore.

 

[BigBadBruins7708]

Funny how this issue didnt exist when the tax "havens" of California, Massachusetts and Illinois won 6 straight Cups

 

[Golden_Jet]

They're all paid in USD, so no.

That doesn’t matter, the CDN teams have to pay the 35% difference, that’s way more than any tax difference.

So there is no point for a tax equalization, as that is so much more complicated to implement. I assume it just stays the way it is, CDN teams and tax states will be at a disadvantage, just have to live with it.

 

[VivaLasVegas]

Always the bestestest summer thread, along with QC not having a team.

 

[Salsero1]

You mean the cap that was implemented in 2005? It was about 15 years after that, that we started to make the playoffs on a regular basis. You know how many years we were in the league before 2005? 12. Your idea of "suddenly" is strange. What, do you live next to a blackhole?

A blackhole of success

 

[Drytoast]

Ah yes, I remember the days when Detroit and other teams could just buy themselves a Cup winning roster. Don't blame you for wanting those days back.

I don't think having an English Premier League style system would be too popular when one of the same 6 teams win every year and half the league has no chance.

that's what we have now guy.

in the past 15 years 9 finals have involved at least 1 no state tax market. 6 have won the cup.

There were only 5 no state tax teams in a league of 32. the krakken just joined yesterday.

 

[hairylikebear]

I think if we relocated teams from some of these cities where no NHL player wants to play, we'd stop hearing about income taxes.

 

[Golden_Jet]

the cap was implemented in 05-06 but eh precap contracts didn't suddenly disappear. as those old contracts ran their course cap.

That’s not how the cap was implemented, all existing contracts were rolled back 25%.

 

[67 others]

They can't both make MILLIONS more and take much smaller contracts. The tax situation is significant but its real value to players is often exaggerated.

Players often negate much of the advantage if they take a significantly smaller AAV to play in a no tax state. Using Puckpedia's tax calculator a player signing for $9M in Florida would pay about $3.3M in taxes leaving him with $5.7M. If that same player signed in Edmonton for $10M the player would pay $4.8M in taxes leaving him with $5.2M. But that is simply a first order estimate. And I wonder if the calculator really does give a true picture of the gap given the complex nature of taxation for an NHL player that sees good parts of their income taxed outside of their place of residence. The calculator seem to only take the marginal tax rate of the players home city into consideration. Vegas, Dallas and Florida would have very different schedules so it is impossible that their tax rates would be the same. In addition, while Washington is listed at 36.57%, the same as the other no tax states, they have a 9.9% surcharge on athletes making more than $1M that is not included in the calculations but will start in 2028. The real gap is probably significantly less than this number because players in the lowest tax states will play games in higher taxed regions and players in the highest taxed locations will play games in Florida, Vegas and Dallas.. Moreover, there are ways that the Edmonton player can structure his contract to eliminate a good chunk of that gap.

For players signing new deals in lower taxed states we have seen a fair number take less than what they could get on the open market in terms of nominal dollars. Mostly that has been to the benefit of the team's salary cap and less so financially to the player who may well have given up all or most of the no tax advantage. When the player really benefits the most is when they are traded from a high tax region to a lower tax region with a long term existing contract such as in the case of Brady Tkachuk.

Brother, like i said, thats millions of dollars. you are looking at it as "it's only 300k different take home pay"

Now multiply that by years of the contract

 

[Beezeral]

My favourite part of this argument is that the tax free state fans say it’s nbd.

Well if it’s not an actual thing then why not fix it, if it wouldn’t actually change anything surely it shouldn’t matter if it’s adjusted. If you immediately answer no to that, you prove there’s a tax advantage

Are we going to adjust the cap based on cost of living? What about endorsements? An original6 adjustment? Childhood favorite team adjustments ? Weather tax? Where does it end?

 

[ottawa]

Funny how this issue didnt exist when the tax "havens" of California, Massachusetts and Illinois won 6 straight Cups

You're right, but the salary cap in 2015 was 70m so the disparity between the adjusted salary cap for Boston, Chicago and LA and no-state tax / low state tax was less and throw in that the contracts weren't as big either.

As the salary goes up, the spread between the top and lower tax team will naturally get bigger too and now we're also seeing larger contracts. In the Boston to LA era you had to be more careful with how much % of your cap you allocated to a player compared to today.

 

[StrangeVision]

I'm just glad Florida decided to eliminate the state income tax in 2023ish, if only they had done that way back in '93.

 

[Drytoast]

If you don't want to compete for a cup, go buy one and be done with it. No we're not removing the cap.
After 2005, you mean we didn't go through a rebuild? We just waited out contracts and started signing everybody? We didn't acquire our cup winning team through trades and drafting? Barkov, Ekblad, Tkachuk, Reinhart, Bennett, Loustarinen, Lundell, Montour, etc. All acquired through drafting and trades. And that doesn't include guys like Verhaeghe, and Mikkola, and Kulikov, and Schmidt, and OEL, Forsling (picked up off of waivers for god sake) etc. Who any team could have had. They were signed for very cheap because no other teams wanted them.

so money is a factor? got it!

 

[Strangle]

Just get rid of the salary cap. Problem solved.

This is really the correct answer

f*** the salary cap altogether

 

[Beukeboom Fan]

Maybe it's a little bit of the tax thing.

Maybe it's golfing on off days in February.

Maybe it's more the allure of not getting death threats online if you turn the puck over in the playoffs.

Maybe it's all of the above.

I think that there needs to be cap equalization for "high poon" locations. You never see players having strong night life locations like NYC/LA on a NTC list, and they have the worse taxes in the US by far.

Seriously though - different players have different desired locations. Some guys want to play close to home, some good places to raise their family, and other guys want better weather, or some combination of all of that. Bottom line for me is that every player wants a chance to win, and if you have a terrible FO making bad decisions, guys are less likely to put up with that now and want out. I don't see guys forcing their way to the Preds to avoid paying taxes, even though Nashville is a great city.

 

[Salsero1]

that's what we have now guy.

in the past 15 years 9 finals have involved at least 1 no state tax market. 6 have won the cup.

There were only 5 no state tax teams in a league of 32. the krakken just joined yesterday.

Oh, so the wrong teams (to you) are winning is the problem?

 

[Drytoast]

I'm just glad Florida decided to eliminate the state income tax in 2023ish, if only they had done that way back in '93.

Florida’s “no income tax” status isn’t a recent policy shift — it’s a century-old constitutional decision that has been continuously reinforced since 1924

 

[Drytoast]

Oh, so the wrong teams (to you) are winning is the problem?

well it's odd that we are not ok with the small group of rich teams always winning...but we are ok with the small group of no state tax markets always winning.

hrmmm

 

[ottawa]

Are we going to adjust the cap based on cost of living? What about endorsements? An original6 adjustment? Childhood favorite team adjustments ? Weather tax? Where does it end?

I think a lot of fans are chalking it up as it being a non-issue (especially the ones unaffected by it) but the NHL itself is aware that it's a problem. They just don't have an easy fix for it.

NHL monitoring teams’ income-tax advantages, but ‘there are no easy fixes’

Some players believe a salary-cap advantage is created based on geography, but is there a solution?

www.nytimes.com

 

[StrangeVision]

Florida’s “no income tax” status isn’t a recent policy shift — it’s a century-old constitutional decision that has been continuously reinforced since 1924

So, like, did you really not sense the sarcasm?

Or are you an AI bot.

 

[PizzaTime]

I don't follow other North American sports leagues as closely as the NHL, does this issue affect other leagues too?

Either way, I think the real issue right now isn't the taxes but the influx of NTC's and NMC's. There's simply way too many of them and the teams have no leverage when a player suddenly wants to leave. There's no balance.

 

[Dr Jan Itor]

Lost in the tax stuff is the non-tax states making some insane trades, great draft picks, crazy good waiver claims.

Plenty of no tax states could've traded for M. Tkachuk. Plenty of no tax states could've traded for Eichel and Stone.

Forsling was there for anybody. Bennett was there for anybody with a couple 2nds. Verhaege was there for anybody.

 

[Dr Jan Itor]

I don't follow other North American sports leagues as closely as the NHL, does this issue affect other leagues too?

Either way, I think the real issue right now isn't the taxes but the influx of NTC's and NMC's. There's simply way too many of them and the teams have no leverage when a player suddenly wants to leave. There's no balance.

It comes up now and then in the NBA, but doesn't appear to be close to the extent of the NHL, at least on here.

Football and baseball, barely hear about it, if at all.

 

[WhiskeyYerTheDevils]

Then there's the factor of winning as well. People say Canadian teams are mismanaged, but they have to spend more or offer longer contracts or NMCs to attract talent due to higher taxes, shittier weather, media, etc. which all contributes to some high tax teams not winning.

So should we adjust the cap for all of those factors?

Again, go back and look at my edited post...the odds of a no-tax or low-tax team going to the finals and winning is a hell of a lot higher which is for some reason a lot of people want to ignore.

Is it a lot higher? Or is it only a lot higher in the last handful of years? Because I seem to remember a recent decade of hockey where Chicago, Detroit, and the California teams dominated the West despite high taxes at the state and local level.