Friedman: CRA going after former athletes for Canadian teams could impact their ability to draw free agents

[Ianturnedbull]

These ridiculous tax rates are why players avoid Canada

OMG.

I wish they would.

Players,

Avoid Canada Please. We don't need you if all you want to do is spend your life avoiding taxes.

The reality is they all can't play baseball in New Hampshire. Some state taxes are as high as many Canadian Provinces.

 

[Lady Stanley]

They already did that and the Canadiens got humiliated. And college football has had a similar concept for decades and the SEC-Big Ten playoff games have been equally embarrassing for the north. Not our fault you cold-weather people can’t compete.

You're completely discounting the first 2 rounds, which were a massive deal in the north.

Like this is the thing that is just truly absurd.

The lack of interdivisional play was truly and absurdly awful, it made the season almost unwatchable.

And yet a lot of people have fond memories of the playoffs.

 

[Lady Stanley]

I’m sure Joey Bats is shaking in his boots in his mansion in the DR at the sternly-worded letter that he received from the CRS.

DR and Canada don’t have an extradition treaty and like the DR would anyways.

The top tax bracket in every country supplies most of the tax revenue, takes three seconds to find on Google. Poor people don’t pay high taxes, they get benefits.

I'd add it's not only poor that don't pay taxes you need to be in the top 25% of earners to actually pay real taxes.

Anyone working for government doesn't pay taxes. They collect tax money for their wages, and then they "pay a bit of that back" in the form of taxes. It's like me asking you for $100 giving you $40 back and telling you I earned that $60 for myself.

Then you factor in the costs you put on society. You use healthcare/education/roads/pensions/military protection etc your entire life. You need to pay that back with your taxes, before you even start to "pay taxes"

By this logic Canada should have the world's best or at least top-5 roads, hospitals and public education.

And they don’t. In any of those things. I’m so glad to be out of that downward spiraling shithole.

Well no one has to ever accuse you of being loyal.

 

[RedHawkDown]

Haha yeah all those things are world class here. Look at all those American doctors and nurses from taxless states lining up to come work here.

Big difference between compensation of doctors and nurses and the actual quality of healthcare across the board. Canada isn’t perfect but the system is signifcantly better than the US’a. I’m a doctor and it would take a lot for me to consider working in the US because it is very difficult to have to not treat patients because they can’t pay. Or have something you do put them into absurd amounts of debt.

 

[WaW]

No one wants to have a serious conversation about the tax stuff because in general, Canadians exaggerate how much the tax rates currently handicap them (it's a factor, but current is not the "be all, end all", and many American fans know it actually matters to some extent, but don't like to admit it, so they hide their feelings which range from not caring, to flat out enjoying watching the Canadian teams have a disadvantage.

Hence we get childish fights from both sides in every thread like this.

On a serious note though, this specific tax loophole the CRA is trying to close is potentially catastrophic in the future state for Canadian teams, that's no mere exaggeration. From a humanist perspective, I can't say that I feel bad. f*** tax evasion, I want to see millionaires pay their fair share. As a hockey fan, let's just say thank god I chose to support an American team when I was a kid. If you care about your hockey team more than you care about the politics of taxation (not judging, that's your prerogative and its fine), then you should be seriously invested in the CRA losing this battle.

 

[Legion34]

Then they're stupid and need to hire better accountants.

You do realize that the whole point is that this was wrong?
Or at least disputable.

The idea that it’s simple or easy or the government won’t take its money is silly.

Option A: take money in hand
Option B: go through all kinds of hoops and living restrictions and don’t own property and don’t have kids in school and put all of your money in a savings account you can’t touch and pray the CRA doesn’t come after you

Kinda easy to see why low tax states have an unfair advantage that leads to players taking less

EDIT. Allan Walsh actually has a podcast. He had his own tax expert on. He tried to get him to explain this. The expert was not explaining it the way allan was and did NOT say it was the way allan thought it was like at all

No one wants to have a serious conversation about the tax stuff because in general, Canadians exaggerate how much the tax rates currently handicap them (it's a factor, but current is not the "be all, end all", and many American fans know it actually matters to some extent, but don't like to admit it, so they hide their feelings which range from not caring, to flat out enjoying watching the Canadian teams have a disadvantage.

Hence we get childish fights from both sides in every thread like this.

On a serious note though, this specific tax loophole the CRA is trying to close is potentially catastrophic in the future state for Canadian teams, that's no mere exaggeration. From a humanist perspective, I can't say that I feel bad. f*** tax evasion, I want to see millionaires pay their fair share. As a hockey fan, let's just say thank god I chose to support an American team when I was a kid. If you care about your hockey team more than you care about the politics of taxation (not judging, that's your prerogative and its fine), then you should be seriously invested in the CRA losing this battle.

Nope. It’s clearly established exactly the differences. There are equations and precedents and you can clearly see and calculate the differences between high and low tax states.

Your subjective minimization of the level of tax advantage doesn’t mean it’s not true

 

[WaW]

You do realize that the whole point is that this was wrong?
Or at least disputable.

The idea that it’s simple or easy or the government won’t take its money is silly.

Option A: take money in hand
Option B: go through all kinds of hoops and living restrictions and don’t own property and don’t have kids in school and put all of your money in a savings account you can’t touch and pray the CRA doesn’t come after you

Kinda easy to see why low tax states have an unfair advantage that leads to players taking less

EDIT. Allan Walsh actually has a podcast. He had his own tax expert on. He tried to get him to explain this. The expert was not explaining it the way allan was and did NOT say it was the way allan thought it was like at all

No one wants to have a serious conversation about the tax stuff because in general, Canadians exaggerate how much the tax rates currently handicap them (it's a factor, but current is not the "be all, end all", and many American fans know it actually matters to some extent, but don't like to admit it, so they hide their feelings which range from not caring, to flat out enjoying watching the Canadian teams have a disadvantage.


Nope. It’s clearly established exactly the differences. There are equations and precedents and you can clearly see and calculate the differences between high and low tax states.

Your subjective minimization of the level of tax advantage doesn’t mean it’s not true

Here's some advice. Try not putting words in people's mouths. Its embarrassing for you.

I didn't say there was no disadvantage. I very clearly said "it's a factor, just not the be all end all". To disagree with this is to say Canadian teams have zero chance in hell, which just isn't true. That would be a childish argument if it's the case you're making, but as an adult I will let you clarify your point instead of putting words in your mouth.

Yet another case of strawman. This board is f***ing terrible sometimes.

 

[Hockeylife2018]

I've always felt that taxes need to be redone

10% for low income, 15% for middle, and 20% for everyone over x amount...no more loop holes

Being someone that isn't anywhere close to the top bracket, I find it ridicules that people making millions are already paying more then me, why are we taking a larger percent from them aswell

 

[xECK29x]

Tax the rich! That includes your favorite athletes!

 

[DuklaNation]

Lot of posts with little info. I've dealt with IRS, CRA, other countries on corporate taxes for many years. Don't know the finer details of this particular tax deferral (RCA) but sounds like Bautista is being challenged on structure/early payments which may be legitimate. Most of the sports journalists commenting have zero required knowledge to given any kind of informed opinion.

Income tax is going to be a big factor in choosing a team. Current year's income is ONE factor. NHL needs to create a system to balance that out.

 

[Nothingbutglass]

Lot of posts with little info. I've dealt with IRS, CRA, other countries on corporate taxes for many years. Don't know the finer details of this particular tax deferral (RCA) but sounds like Bautista is being challenged on structure/early payments which may be legitimate. Most of the sports journalists commenting have zero required knowledge to given any kind of informed opinion.

Income tax is going to be a big factor in choosing a team. Current year's income is ONE factor. NHL needs to create a system to balance that out.

The NHL doesnt have to do anything. What other league needs a system to balance out tax rates? Its ludicrous.

 

[Hockey Outsider]

Lot of posts with little info. I've dealt with IRS, CRA, other countries on corporate taxes for many years. Don't know the finer details of this particular tax deferral (RCA) but sounds like Bautista is being challenged on structure/early payments which may be legitimate. Most of the sports journalists commenting have zero required knowledge to given any kind of informed opinion.

Income tax is going to be a big factor in choosing a team. Current year's income is ONE factor. NHL needs to create a system to balance that out.

See my comments here - Friedman: CRA going after former athletes for Canadian teams could impact their ability to draw free agents

From what I can tell, CRA is challenging Bautista about whether his contributions to the RCA are "reasonable" (a term which isn't defined in the Income Tax Act). From the information that's been posted, Bautista made significant contributions to the RCA, which would have resulted in huge deductions. It sounds like CRA is trying to deny a portion of these deductions on the basis that they're not reasonable. It'll be interesting to see how this one plays out, as it could have a huge impact on tax planning for professional athletes playing in Canada.

 

[DuklaNation]

The NHL doesnt have to do anything. What other league needs a system to balance out tax rates? Its ludicrous.

NHL has 7 of 32 teams in Canada so its unique in that respect. The fact a hard salary cap exists in the first place lends credence to my argument.

 

[The Marquis]

If you don’t want to be taxed out the ass, sign a contract for less money.

 

[DownIsTheNewUp]

I hope most people realize Taxes aren't so simple as Income x Rate = Taxes at a flat rate and just call it a day, and depend on a whole circumstance of factors.

"Post-Tax" Salary Cap makes no sense, trying to give some sort of "tax credit" for teams in high-tax markets is non-sensible.

This post nailed it and should be stickied at the top of every “tax” thread. Every players tax situation is unique and depends on a hell of lot more factors than what city they play in.

 

[Nothingbutglass]

NHL has 7 of 32 teams in Canada so its unique in that respect. The fact a hard salary cap exists in the first place lends credence to my argument.

What argument? That the NHL should adjust cap for tax rates? Just national rates or combined tax burden for states and municipalities as well? What about sales tax, excise taxes, cost of living? The NHL would need a new department bureaucracy just to figure out all the permutations. Why does he NHL want to do this again?

 

[BraveCanadian]

Tax the rich! That includes your favorite athletes!

Like Wayne’s dad told him, don’t play where the money was, play where it’s going to be!

 

[Lady Stanley]

This post nailed it and should be stickied at the top of every “tax” thread. Every players tax situation is unique and depends on a hell of lot more factors than what city they play in.

And none of this will ever supersede the difference in tax systems between two countries.

No one who's every professional worked with this issue would say otherwise.

You guys are just making things up.

The whole matthews contract is your goto, and then you leave out he hates winter.

 

[DuklaNation]

What argument? That the NHL should adjust cap for tax rates? Just national rates or combined tax burden for states and municipalities as well? What about sales tax, excise taxes, cost of living? The NHL would need a new department bureaucracy just to figure out all the permutations. Why does he NHL want to do this again?

I work with very wealthy clients. 95% of them rank taxes amongst their greatest concerns. That's just the reality of high income earners. They need to rework the cap system because there is an imbalance, just like the reason it exists in the first place. Commodity tax, cost of living, etc aren't nearly as big a factor.

 

[Nothingbutglass]

I work with very wealthy clients. 95% of them rank taxes amongst their greatest concerns. That's just the reality of high income earners. They need to rework the cap system because there is an imbalance, just like the reason it exists in the first place. Commodity tax, cost of living, etc aren't nearly as big a factor.

Good for you. You still haven't produced a convincing argument that the NHL has to do something about it.

 

[DuklaNation]

Good for you. You still haven't produced a convincing argument that the NHL has to do something about it.

Neither have you.

Most will base their decision on money. Reality is many players choose lower tax areas vs higher tax areas mostly in Canada. There are options in US locations like NY. It isn't just weather, less pressure environment, etc Its after tax income during term of contract in ALL respects.

 

[rsteen]

They already did that and the Canadiens got humiliated. And college football has had a similar concept for decades and the SEC-Big Ten playoff games have been equally embarrassing for the north. Not our fault you cold-weather people can’t compete.

And when they first expanded, they put all the expansion teams in one conference and then the winner got creamed when they met an O6 team in the SCF. If Canadian teams are really so uncompetitive, the same thing will happen with a Canadian division.

 

[Lady Stanley]

Good for you. You still haven't produced a convincing argument that the NHL has to do something about it.

Howl bout dis.,

Simply admit to it, and let people decide on their own.

This is why these threads are so insidiously toxic.

People enjoy gas lighting and trolling, gatekeepering and getting on with infantile bully/nonsense to shutdown valid concerns that have a factual on topic relevance to the actual business of the NHL.

I'm not upset Canadian teams can't win the cup. I'm not that guy. I'm upset there's nothing else to play for. If there's a Canadian division every year locals teams could play for something. The off chance they win a cup is just gravy.

Regardless be honest and transparent let people make up their own minds with the fact that are actually in plane side.

30 years of zero success it isn't some hush hush deal with the refs. It's a flat out product of the cap. Most infuriating was that it was written into the players agreement at the exact time the Canadian economy recovered from the chaos we were in during the early 90s.

Every Canadian team plays to the cap, even when on rebuilds, it's automatic that these franchise have to pay to the cap, to get backcontracts/draft picks.

The Jets have the richest owner in the league. A small market must play to the cap in bad times, and then can't even harness the advantage of their owner in the good times. This does nothing but hurt most Canadian teams.

And again, we bankroll the league on a per capita basis.

 

[Nothingbutglass]

Neither have you.

Most will base their decision on money. Reality is many players choose lower tax areas vs higher tax areas mostly in Canada. There are options in US locations like NY. It isn't just weather, less pressure environment, etc Its after tax income during term of contract in ALL respects.

Does the NHL need to adjust the cap for weather and pressured environment as well? It's a stupid argument and just comes off as whining. Its not the NHL's job to make your market desirable.

 

[Voodoo Child]

Why would that be logical when Canada is nowhere near the top 5 countries in tax revenue by % of GDP? Based on 2021 statistics it's ~75th alongside global superpowers like Azerbaijan and Uganda. And of course the countries with the highest tax rates like Denmark, Finland, Norway, Germany, Sweden and New Zealand are widely recognized as having the world's best public education and healthcare systems.

Maybe if Canada collected more taxes to fund its schools you would have learned how logic works.

Because certainly, the only tax revenue that exists is Income tax!

Not like there aren’t taxes on:

Imports and exports (5% on imports), Canada is a net exporter of food and energy which aren’t always taxed but hey, still revenue which ultimately will be taxed somewhere down the line!

Real estate, which is about 20% of the economy - that’s not going to blow up spectacularly in the near future I’m sure, but at least there’s now a 25% rate on foreign-owned real estate. And property taxes and you’ve gotta pay those.

Speaking of looming disasters there’s a massive underfunded pension liability crisis on the horizon. Better raise those taxes another five points - or bring in a million people a year so Boomers can reverse mortgage their home to buy a boat.

From a distance to me it’s hilarious watching them not ‘assimilate’ and even more hilarious seeing them say ‘this place sucks I’m going back to India.’. Canada used to pride itself on being a ‘mixed salad’ to America’s ‘melting pot’ - too bad it doesn’t offer nearly as much as America does in terms of wages, weather and opportunity.

Canada has a Carbon tax - it’s not too much but then you know who doesn’t have a carbon tax? China, the world’s largest country by Co2 emissions by more than twice.

Sales tax - which you pay and I don’t because I don’t live there anymore so hahahaha.

And of course the brain drain. I went to school with three people who became doctors and all live in the States because they get paid more. Enjoy seeing the doctor after waiting six hours in the ER with a broken leg (like I did when I was 14).

Canada doesn’t have a sin tax but it might as well - living in Niagara I used to cross the border a few times a month and get booze and cigs and resell them, triple my money compared to LC prices.

And yet countries with low taxes who have nothing to export except financial services and shipping - like Hong Kong and Singapore and Switzerland, have world class everything - transport, logistics, amenities and even their service economies are far superior. I’ve been to all of them.

Growing up in Canada in the 80’s-90’s was an awesome experience and it breaks my heart that in 30-50 years or less the country will cease to exist.

Enjoy your $4200 a month studio apartment at Yonge and 7.

EDIT: And just in time, your tax dollars at work!