Idea re taxes and salary cap

[BigBadBruins7708]

These arguments don't actually work for several reasons. First off endorsements are the responsibility of the individual. you could play in New York and not benefit from the endorsement opportunities or you could be in Nashville and get huge deals. This has more to do with the individuals business model. As for prestige, again this would be for the individual to decide if they find individual non-monetary value in history. Taxes are an actual dollar value pre-determined for all people in a specific region. TB can offer Stamkos $8.5 annually and his take home would be the same as if he was paid $10.2 in Vancouver. The difference between the income tax on $81.5 million in Toronto and Vegas is $12million dollars. This is a clear discrepancy that is clearly identifiable and has a tangible figure attached to it.

Ok, it still doesn't harm or benefit any team over another when it comes to contracts...in any sport.

 

[Boondock]

Ok, it still doesn't harm or benefit any team over another when it comes to contracts...in any sport.

Agree to disagree - I think the option to keep an additional 15% of your paycheck (especially with high escrow and a 10% league imposed holdback) would give certain teams a competitive financial advantage. There is no way to make all things equal, I would think reducing the signing bonus amounts would be my first step, but to act as if the take home pay doesn't create a competitive discrepancy isn't accurate either. I also understand that there are some significant tax law differences in Canada and the USA and that US tax laws allow for more tax deductions such as interest on loans (mortgages, vehicle loans etc.). I have never dug too deeply into this but the much bally-whooed state income tax isn't the only tax advantage based on location.

 

[KyleDubasBoyGeniua]

Agree to disagree - I think the option to keep an additional 15% of your paycheck (especially with high escrow and a 10% league imposed holdback) would give certain teams a competitive financial advantage. There is no way to make all things equal, I would think reducing the signing bonus amounts would be my first step, but to act as if the take home pay doesn't create a competitive discrepancy isn't accurate either. I also understand that there are some significant tax law differences in Canada and the USA and that US tax laws allow for more tax deductions such as interest on loans (mortgages, vehicle loans etc.). I have never dug too deeply into this but the much bally-whooed state income tax isn't the only tax advantage based on location.

That;s only way some teams can equal contracts offered in no state tax areas.

 

[DistantThunderRep]

Still not sure if I get the issue here.

Effective tax rate takes into account deductions, and the statistic "Effective tax rate" that economists and policy people use is an average of those individual effective tax rates for a given income.

At the time of signing what you can do is subtract the average effective tax from the pre-tax salary to get an estimated post-tax salary for that player and use that as your "cap" figure. So for example, say a guy that is signed for $900k would get an estimate post-tax salary of $675k, that will be his cap figure. Whatever his accountant does after that point, to deduct his home gym or change his primary residence, that's their business. The average deduction and average tax payment is what is factored in. Everyone in that bracket will have an accountant doing shenanigans for them, it's fine to use the average.

Doesn't account for the fact if a player isn't a resident in the city he plays. Effectively someone like Matthews gets paid almost all in bonuses, which he gets taxed in Arizona. Not Toronto. Do you then deem the cap hit be valued at the city the player plays in regardless whether they get taxed there or not?

 

[majormajor]

Doesn't account for the fact if a player isn't a resident in the city he plays. Effectively someone like Matthews gets paid almost all in bonuses, which he gets taxed in Arizona. Not Toronto. Do you then deem the cap hit be valued at the city the player plays in regardless whether they get taxed there or not?

Just make all salary paid in the city of employment.

 

[DistantThunderRep]

Just make all salary paid in the city of employment.

Owners won't go with that. The players could care less there.