Idea re taxes and salary cap

[majormajor]

Odd that its almost exclusively Toronto fans bringing this up eh?

Not a Leafs fan, bud.

 

[Golden_Jet]

What "exchange difference" are you talking about? Players are paid in USD which is actually worth 1.337CAD atm so... not sure what you're getting at with this

Odd that its almost exclusively Toronto fans bringing this up eh?

Owners of Canadian teams generate Canadian dollars not US, but pay out salaries in US.

 

[triggrman]

It's not a zero sum change. There are glaring factors of why doing money after tax is problematic.

A real basic one is the whole league would have to do a refactor of the cap, and Toronto will still cry like babies because their GM doesn't understand the word "Negotiate" when it came to their core.

There's not many players that are going to share their returns with the owners. I wouldn't share mine with my employer.

 

[Golden_Jet]

There's not many players that are going to share their returns with the owners. I wouldn't share mine with my employer.

Why, the owners know what they pay, since they write the cheque’s.

 

[MrHeiskanen]

While we are at it, let's give teams from Southern markets a greater cap increase because the high end players on these teams have less marketing opportunities and sponsorship opportunities compared to Canadian teams.

Gotta make it fair and all.. right?

 

[KyleDubasBoyGeniua]

I really don't think taxes are as big of a deal as most think.

 

[triggrman]

Why, the owners know what they pay, since they write the cheque’s.

Write offs, medical bills, loans, interest, charities, retirement funds, investments, etc can all be pretty personal. Knowing what I make is different than knowing how I spend my money.

 

[KyleDubasBoyGeniua]

I think signing bonuses are a bigger deal than "Taxes".

 

[triggrman]

I think signing bonuses are a bigger deal than "Taxes".

I bet COVID-19 slows that down. Take Matthews, he got his $16m signing bonus in July, he’ll only have to discount/defer whatever, his 700k salary.

 

[KyleDubasBoyGeniua]

I bet COVID-19 slows that down. Take Matthews, he got his $16m signing bonus in July, he’ll only have to discount/defer whatever, his 700k salary.

Yup. Matthews has made 30.4 million in Bonuses last 2 July. And I have to hear he wants out due to "Taxes" LOL
But yes, even wealthy teams might have to cut that out. Arizona actually missed paying their relative small bonuses om July 1st

 

[triggrman]

Yup. Matthews has made 304 million in Bonuses last 2 July. And I have to hear he wants out due to "Taxes" LOL
But yes, even wealthy teams might have to cut that out. Arizona actually missed paying their relative small bonuses om July 1st

Lol he’s not even paying Canadian taxes on the signing bonus since he lives in Arizona in the off-season

 

[KyleDubasBoyGeniua]

I bet COVID-19 slows that down. Take Matthews, he got his $16m signing bonus in July, he’ll only have to discount/defer whatever, his 700k salary.

Yup. Matthews has made 304 million in Bonuses last 2 July. And I have to hear he wants out due to "Taxes" LOL
But yes, even wealthy teams might have to cut that out. Arizona actually missed paying their relative small bonuses om July 1st

 

[Richard]

I'd def play in Nash Dallas or Florida if I was an NHLer. f*** Cal and Canada- no way I would ever pay those taxes.

 

[Treb]

A simpler, more straightforward, and total fix is to just have the salary cap be on post-tax salary, not pre-tax salary. Solves your problem right there.

I don't know why the Canadian, Californian, and Northeast teams aren't lobbying for that, though perhaps they are and I just don't know about it.

High tax team would be advantaged as I assume tax write off would not be considered as they change on a year to year and personal basis.

 

[majormajor]

High tax team would be advantaged as I assume tax write off would not be considered as they change on a year to year and personal basis.

I don't follow.

 

[pbgoalie]

Well, if the new Biden Administration follows through on the tax increases above $400,000,

Canadian teams will start to look pretty good tax wise

barring a vaccine led miracle, state income taxes could be the least of the NHLs worries

the costs coming out of this will be staggering

 

[Treb]

I don't follow.

Let's say taxation is 20% but you're able to get it to 0-5% using different means. That team would be advantaged versus a team that has a 5% taxation as the cap hit would be lower but players end up making the same at the end of the day.

Unless you want the cap hit to be calculated and changed after each fiscal year.

 

[majormajor]

Let's say taxation is 20% but you're able to get it to 0-5% using different means. That team would be advantaged versus a team that has a 5% taxation as the cap hit would be lower but players end up making the same at the end of the day.
.

The "effective tax rate" is not that hard to estimate.

Unless you want the cap hit to be calculated and changed after each fiscal year.

You could do that or you could just fix the "cap hit" at the time of the player's signing. I prefer the latter, but I'd honestly take both over the current system.

 

[Treb]

The "effective tax rate" is not that hard to estimate.



You could do that or you could just fix the "cap hit" at the time of the player's signing. I prefer the latter, but I'd honestly take both over the current system.

The effective tax rate is different for everyone depending on how good (or sleazy) their accountant is.

 

[majormajor]

The effective tax rate is different for everyone depending on how good (or sleazy) their accountant is.

Sure, but there is a statistic called effective tax rate that gives you a close enough figure. Some slight variation person to person is not at issue here.

 

[KyleDubasBoyGeniua]

I'd def play in Nash Dallas or Florida if I was an NHLer. f*** Cal and Canada- no way I would ever pay those taxes.

Really depends on the contract. Bonuses are paid-out in the offseason and are not taxed where you play. Matthews is making more than he would in Florida or Dallas.

 

[DistantThunderRep]

Sure, but there is a statistic called effective tax rate that gives you a close enough figure. Some slight variation person to person is not at issue here.

That is actually the issue people are bringing up, the variation of players from one team to another.

 

[majormajor]

That is actually the issue people are bringing up, the variation of players from one team to another.

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.

 

[Boondock]

ok, but teams that are in the bigger cities get their cap reduced based on endorsement opportunities that smaller markets dont have

and teams with a rich history get theirs reduced for offering a prestige that lesser franchises cant.

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.

 

[Whalers Fan]

Can the cap be adjusted based on weather also? Teams from the north should have a larger cap to make it more even.

While we are at it, let's also adjust for differences in real estate, gasoline, food, movie theater tickets, healthcare, restaurant meals, cotton candy, pet licenses, manicures, etc, etc, etc.