Let’s even the playing field…after tax payroll cap

WhereAreTheCookies

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Feb 16, 2022
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I can't wrap my head around thinking 10% is a high sales tax. I mean ya for the US it is, but for the more socially responsible countries that's peanuts.
Ok then how about property taxes? Seems like most provinces have less than 1% property tax in Canada, but for the more socially irresponsible countries that's peanuts. My Taxes this year will surpass 10k USD on a home valued at 500k, in most provinces in Canada I would be paying 1/3rd of that or less.
 

Khelandros

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Feb 12, 2019
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This shit again?

 

Lays

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Jan 22, 2017
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No reason as to why NYR and the Leafs should have the same cap hit as Arizona considering they keep that franchise alive
 

Hockey Outsider

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Jan 16, 2005
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This topic again. To quote myself from an old thread:

After-tax income is much more difficult to quantify than many people think. A partial (but incomplete) list of factors that need to be taken into account:
  • Marginal vs average tax rate - All NHL players would face the highest marginal tax rate on their remuneration, but their effective tax rate would always be lower due to the fact their income passes through the lower tax brackets first. So we couldn't calculate a general after-tax salary cap at the team level - it would have to be calculated separately for every player.
  • Legal residency - It's possible for a player to live in Canada but be a resident, for tax purposes, of the US (or vice versa). Thus, a player might be employed by an American team, but would be a resident of Canada. Effectively, that player would be paying tax at the Canadian rate, despite playing for a US team.
  • Signing bonus - The above point is further complicated by signing bonuses. There are specific provisions in the Canada/US tax treaty that effectively limit signing bonuses, paid by Canadian teams, to be taxed at that individual's US combined federal/state rate. So a Canadian team can pay a huge signing bonus to an American resident without any disadvantage from a tax perspective (Auston Matthews is a good example).
  • Deductions - In general, US taxpayers can deduct agent fees, while Canadian players can't. Should this be taken into account? Why or why not? Similarly, Canadian residents can establish and RCA, which can provide significant tax benefits if used properly. Should that be taken into account? Who makes these decisions?
  • Jock taxes - Several jurisdictions tax athletes on a pro-rated portion of their income based on when games are played - so you'd need to take the schedule into account, for every player, to get an accurate estimate of their after-tax income.
A comprehensive list of factors that need to be considered would be much longer. But even these points should indicate that calculating an after-tax salary cap would be a convoluted ordeal, and it would have to be constantly updated as facts change. The league would probably have to pay lawyers or accountants several hundred thousand dollars to do this.

From the owners' perspective, the value of this information isn't worth the cost - so taxes remain one of numerous inequalities between cities including cost of living, endorsement opportunities, climate, nightlife, etc.
 

Beezeral

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Mar 1, 2010
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I know, we should also have a special draft system where teams can reserve players that were born within the geographic radius of the arena.
 

CarolinaBlueJacket

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Mar 3, 2011
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Tax rate is one of many considerations where a player, or any of us, choose to live. This is a personal decision for each player. More rules or laws are rarely the answer to correct "perceived" injustices. My team, Columbus, is not a destination location like Manhattan, LA or Tampa. Should Columbus have a higher cap than those teams to balance the playing field? Absolutely not.
 

Butch 19

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May 12, 2006
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I'm perfectly in favour of getting rid of the salary cap. Have a luxury tax like the NBA. I hate the salary cap and not even because I'm a Leafs fan, we sucked before the cap too. I hated watching well built teams like the Blackhawks getting dismantled because of the cap.

But if we are going to have a cap for "parity," seems natural to at least have it be fair no?
Fans of 31 other teams watched this happen, and they enjoyed it.

And the NHL system is fair right now.
 

edog37

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Jan 21, 2007
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I'm perfectly in favour of getting rid of the salary cap. Have a luxury tax like the NBA. I hate the salary cap and not even because I'm a Leafs fan, we sucked before the cap too. I hated watching well built teams like the Blackhawks getting dismantled because of the cap.

But if we are going to have a cap for "parity," seems natural to at least have it be fair no?
we have a cap because the league was facing an existential crisis. The fact that some teams can manage it better than others is no reason to do away with it. Maybe Canada should adjust its tax rates to make things a bit more competitive on the world stage. US states do this & it's easy to see the lower tax states population rates vs the higher tax states.

I can't wrap my head around thinking 10% is a high sales tax. I mean ya for the US it is, but for the more socially responsible countries that's peanuts.
what does this statement even mean?
 

CarolinaBlueJacket

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Mar 3, 2011
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North Carolina
I can't wrap my head around thinking 10% is a high sales tax. I mean ya for the US it is, but for the more socially responsible countries that's peanuts.
As an American that has traveled the world many times, I am getting tired of the stereotype that Americans are arrogant and dumb, but then citizens of other countries (mostly Canada and Europe) constantly badmouth the US and her citizens. People who do this are becoming what they claim to dislike. American is a great place to live, but I could see myself in other countries as well. There are good and bad with all places and all places are filled with good and bad people.
 

Lazlo Hollyfeld

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Mar 4, 2004
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I'm sure this has been discussed many times in various places at various time, but in light of Matthew Tkachuk's reported "wish list" being all tax-free states (aside from his home in St. Louis), it makes me think.

Seems like a clear disparity that can easily be remedied. Players aren't dumb, or at least their agents aren't. They know what the take home will be in various places so there's no advantage to a team being able to offer more money than another if they work out to the same take-home pay.

Conversely, there's an obvious disadvantage to having to offer a player more than another team just for the take home pay to work out the same when all teams operate under the same cap limit.

The cap was brought in to level the playing field, so let's make sure the playing field is level.

Is there an obvious impediment to this that I am missing?
That list of teams has been debunked as has the myth of the state tax advantage.
 

Nihiliste

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Feb 8, 2010
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I'm sure this has been discussed many times in various places at various time, but in light of Matthew Tkachuk's reported "wish list" being all tax-free states (aside from his home in St. Louis), it makes me think.

Seems like a clear disparity that can easily be remedied. Players aren't dumb, or at least their agents aren't. They know what the take home will be in various places so there's no advantage to a team being able to offer more money than another if they work out to the same take-home pay.

Conversely, there's an obvious disadvantage to having to offer a player more than another team just for the take home pay to work out the same when all teams operate under the same cap limit.

The cap was brought in to level the playing field, so let's make sure the playing field is level.

Is there an obvious impediment to this that I am missing?

Can we also adjust for subjective desirability of the city? That way I can get a really lucrative job doing the adjustments for the league by adjusting the cap for:
- metro size
- number of NHL players who hail from relevant metro area
- financial strength
- fanbase
- travel schedule
- international airport connections
- proximity to natural features like ocean, mountains
- weather
- media environment
- family friendliness
- schooling options for players with kids
- dating scene as measured by tinder statistics
- access to party drugs

We can give each team an overall cap adjustment based on metro qualities and then that cap adjustment can be modifiable by the player they’re looking at and what phase of life they’re in.

Like a player with young kids, a city like Raleigh will face a bigger cap penalty. A guy like Panarin with a model girlfriend, NYC and LA will face a bigger cap penalty. A single guy, miami will face a bigger cap penalty. Someone who loves hiking, Vancouver and Seattle will face a bigger cap penalty. Someone whose social media data scrapings imply they might enjoy marijuana, Colorado will face a bigger cap penalty.

On the flip side, if you’re the panthers or kings you can overpay for a guy looking for a boring family life or if you’re Edmonton you can overpay for someone who always just wanted to live by the beach.

Teams with a hometown player trying to sign at home will face a bigger cap penalty.

This system will make data nerds all the money while driving teams, players, agents, and fanbases absolutely insane. Win win
 
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edog37

Registered User
Jan 21, 2007
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End thread. The taxes has never been the issue. Players not wanting to deal with hockey crazed Canadian fans when shit goes wrong is. Not everyone is mentally strong enough to stay in those high pressure environments.
That's a load of crap. These guys have routinely played in Stanley Cup playoff situations where the pressure is far more immense. These guys are professional hockey players. If they are that mentally fragile, then explain how these individuals can ever win one Cup, let alone multiple ones as some have done. It's most definitely the tax issue & one cited by players.
 

HFpapi

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Mar 6, 2010
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hell if you’re gonna do that you might as well adjust for inflation too.
It does. The cap has nearly doubled since its initial implementation

Edit: Or do you mean from place to place? Again, just because we can't make absolutely everything equal doesn't mean we shouldn't do so with the low hanging fruit.
 

Nihiliste

Registered User
Feb 8, 2010
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That's a load of crap. These guys have routinely played in Stanley Cup playoff situations where the pressure is far more immense. These guys are professional hockey players. If they are that mentally fragile, then explain how these individuals can ever win one Cup, let alone multiple ones as some have done. It's most definitely the tax issue & one cited by players.

I think it’s more that in some cities, they and their families can never have privacy or blend in. And then if the team is doing poorly, everywhere they and their families go they will have mouthbreathing morons giving them shit for it.

Some players love the limelight and thrive under negative social pressure, like Kadri. But it seems like lots of NHL players don’t
 

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