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

[x Tame Impala]

God I wonder how much Canadians whine about this on their sports talk radio shows? “How are we supposed to win eh!? We’re playin’ all the taxes up here while those Americans get to cheat”

Cry me a river. How about the Canadian teams cut it out with the poor FO hires and decisions? Edmonton was 2 goals away from a Cup win. Maybe if they drafted better, didn’t make terrible trades, and didn’t sign Nurse to a terrible deal they’d have more wiggle room to insulate one of the best playoff duos the league has ever seen.

Toronto allocated half of their cap to 4 forwards who pee their pants in the playoffs? You’re telling me that couldn’t have been avoided? That it’s taxes keeping Toronto in the first round? PUH-lease.

 

[HockeyScotty]

That's on the player. Not the team. Gross salary (AAV) minus income taxes. Bang.

"Income Tax" is derived from more than just the players' salary. It could be affect by his deductions, real property, other income stream/investments/businesses, endorsements, spouses income. It is extremely "personal" to each person and each player will have a bigger or lesser concern about it based on their personal financial situation and acumen.

 

[WhiskeyYerTheDevils]

Ok, so provide the links with evidence showing a 91% marginal rate was a hindrance.


Your glomming on to minutiae that has nothing to do with the point. Again.

The fact that you're willing to lie about your profession just to win an Internet debate destroys your credibility. Ignoring data that contradicts your thesis doesn't help either.

Deductions are a component of a tax bill. What that has to do with the overall rates and economic growth is unclear. Individual deductions have nothing to do with anything when analyzing macro economics for the purpose of this discussion.

You're purposely mudding the waters because you don't have anything else.

You were already provided links to like half a dozen research papers. It's not our fault you can't read.

 

[Viqsi]

Yeah, let me know when this thread becomes about hockey again.

 

[Shane Diesel]

The fact that you're willing to lie about your profession just to win an Internet debate destroys your credibility. Ignoring data that contradicts your thesis doesn't help either.

I haven't lied about anything and you haven't pointed out a single inconsistency no matter how much you claim otherwise. You just nitpick bullshit and call it an argument.

But I definitely see you come the school of rhetoric where you think repeating yourself ad nauseum is a winning strategy.

You were already provided links to like half a dozen research papers. It's not our fault you can't read.

And I've given you tons of links that refute your position and those papers. It's not my fault you can’t read, either.

Funny I can provide links to multiple sources and you you just keeping linking the same source over and over.

Charitable donations are a component of calculating a tax bill, should we be talking about those too when it comes to economic growth? How about deferred losses? Why do you just want to talk about deductions? How about MACRS? We can talk about any component of a tax bill calculation you want.

Doesn't change a single overall point when discussing macro economics.

Your mixing micro and macro elements to try and make a point and you don't realize how silly that is.

 

[Edgelord]

It's not that hard to fix, look at all 32 teams and their cap expenses relative to the player's net pay.
What ever team has the smallest gap is the new benchmark. Then the 31 other teams get a reduction in cap hit amounts to reflect the same gross to net scale.
Ie Drai would still be getting 14 but at a cap hit of 10-11 approx. To cover the difference in the 50/50 split, players and owners would have to agree to a certain % of all contracts to go into the pool to cover the owner's extra cost.

 

[Reality Czech]

It's not the NHL's problem that some states and countries like to tax their citizens so much. Blame the politicians. Plenty of non athletes also move away from these places so they won't be taxed out the wazoo as well. Not sure why the NHL should change their rules just because the governments choose to tax their high earners more than other places. Deal with it.

 

[Demon Eyes]

hmmm, maybe move a team to the bahamas, 0 personal income tax 0 corporate tax

 

[Goose]

Only three ways to increase wealth:

1. Increase income
2. Decrease expenses
3. Reduce taxes

With what’s happening to JT in TO, these no-tax states have a monstrous advantage.

 

[CanadienShark]

And what about exchange rates? Canadian Dollar vs American Dollar. Global Series games? National income tax discrepancies between USA and Canada?

Salary Cap X COLA (weighted by days in each locality) X Exchange Rate Factor (weighted by days in each country) x Municipal/State/National Income Tax Factor (weighted by days in each jurisdiction) = Adjusted Salary Cap per team.

It's so simple.

Why even bother with healthcare if we can't fix every problem, right?

 

[Rafafouille]

Last 10 NBA champions(in no particular order)

5 California
Ohio
Wisconsin
Massachusetts
Colorado
Ontario


That list doesn't scream tax heaven.

 

[matt trick]

As a Sharks' fan I'd love to see a cap equalization benefit. Do we need one to be competitive, or to win a cup? No. Would I happily take a free benefit, absolutely!

Vegas, Florida, Tampa won cups because they were exceptionally well managed. Tampa built a great culture, grabbed two franchise pillars outside the first round (Kucherov/Point). Florida made several shrewd/steals pickups (Tkachuk, Bob, Forsling)- although they had the worst expansion draft maneuver. Vegas brilliantly played the expansion draft (Theodore, Marchessault), then built their top of the line-up by paying for elite players Eichel, Stone, and Pietro. Dallas hasn't yet won one, but they're the best drafting team in the league.

If Canadian, California, and New York teams start stacking these types of moves, the success will follow. Yes, taxes are an advantage. So is being domiciled in California, so is being an original 6 city or historical team, so is having a huge selection of local players, so is having limitless resources, so is being paid in USD when the Canadian loonie is weaker, so is winning a lottery (specifically the right lottery). I wouldn't be surprised to see Edmonton, Montreal, and Vancouver win cups in the next decade.

All that being said, hard for me to imagine a better deal than being a pro athlete in Nashville, Tampa, or Miami. Low tax, great vibe, beautiful women, relatively inexpensive cities, franchises with some winning opportunity.

 

[BLONG7]

As a Sharks' fan I'd love to see a cap equalization benefit. Do we need one to be competitive, or to win a cup? No. Would I happily take a free benefit, absolutely!

Vegas, Florida, Tampa won cups because they were exceptionally well managed. Tampa built a great culture, grabbed two franchise pillars outside the first round (Kucherov/Point). Florida made several shrewd/steals pickups (Tkachuk, Bob, Forsling)- although they had the worst expansion draft maneuver. Vegas brilliantly played the expansion draft (Theodore, Marchessault), then built their top of the line-up by paying for elite players Eichel, Stone, and Pietro. Dallas hasn't yet won one, but they're the best drafting team in the league.

If Canadian, California, and New York teams start stacking these types of moves, the success will follow. Yes, taxes are an advantage. So is being domiciled in California, so is being an original 6 city or historical team, so is having a huge selection of local players, so is having limitless resources, so is being paid in USD when the Canadian loonie is weaker, so is winning a lottery (specifically the right lottery). I wouldn't be surprised to see Edmonton, Montreal, and Vancouver win cups in the next decade.

All that being said, hard for me to imagine a better deal than being a pro athlete in Nashville, Tampa, or Miami. Low tax, great vibe, beautiful women, relatively inexpensive cities, franchises with some winning opportunity.

The tax disadvantaged teams in Canada and the US simply have to be smarter with their drafting, and then of course their cap and contracts.......there is no way to balance all the taxes situation with different countries, provinces and then states......just no way.

Hire smart hockey people.....make smart hockey decisions,,,..the tax thing is just another challenge.
Unfair? maybe, but it's just one issue, and as they say, life, isn't fair.

 

[OrangePMD]

It's not that hard to fix, look at all 32 teams and their cap expenses relative to the player's net pay.
What ever team has the smallest gap is the new benchmark. Then the 31 other teams get a reduction in cap hit amounts to reflect the same gross to net scale.
Ie Drai would still be getting 14 but at a cap hit of 10-11 approx. To cover the difference in the 50/50 split, players and owners would have to agree to a certain % of all

So, more escrow. The PA will be absolutely ok with that, I'm sure. It's great though that you acknowledge that the 50/50 split is the be all end all part of the cap, and any suggested new system has to fit into that.

 

[John Mandalorian]

Only three ways to increase wealth:

1. Increase income
2. Decrease expenses
3. Reduce taxes

With what’s happening to JT in TO, these no-tax states have a monstrous advantage.

Doesn’t Toronto physically pay bonuses upfront because they have the most substabtial cash flow in the league and can afford to do it? Are you going to pretend that Toronto is willing to share this wealth?

 

[MikeyMike01]

Someone has yet to explain to me why the mythical income tax advantage affects the NHL, but has absolutely no effect in other leagues like the NFL.

 

[Goose]

Doesn’t Toronto physically pay bonuses upfront because they have the most substabtial cash flow in the league and can afford to do it? Are you going to pretend that Toronto is willing to share this wealth?

Yes I am pretending, absolutely you nailed it.

Or maybe they’re just independent variables and you think you’re making a point but you’re actually not?

Teams in cities where it’s warm and spouses want to live also have an advantage over Edmonton and Winnipeg, for example, but there’s no causal link between the weather and tax advantages, just like there’s no causal link between which teams generate the most revenue and can afford to pay salaries up front and which have tax advantages.

Yes Toronto has an advantage over other clubs with its ability to back up dump trucks of cash on demand, no it has absolutely nothing to do with Vegas’ tax advantage.

 

[Three On Zero]

God I wonder how much Canadians whine about this on their sports talk radio shows? “How are we supposed to win eh!? We’re playin’ all the taxes up here while those Americans get to cheat”

Cry me a river. How about the Canadian teams cut it out with the poor FO hires and decisions? Edmonton was 2 goals away from a Cup win. Maybe if they drafted better, didn’t make terrible trades, and didn’t sign Nurse to a terrible deal they’d have more wiggle room to insulate one of the best playoff duos the league has ever seen.

Toronto allocated half of their cap to 4 forwards who pee their pants in the playoffs? You’re telling me that couldn’t have been avoided? That it’s taxes keeping Toronto in the first round? PUH-lease.

As a 40 year old Canadian hockey fan, you know how many times I have heard about unfair tax in the NHL? once and thats on here. This isn’t a real concerning issue, it’s just something fans and media are drumming up recently due to the age of social media. The tax difference for these athletes is so minuscule that you’d hardly notice.

 

[John Mandalorian]

Yes I am pretending, absolutely you nailed it.

Or maybe they’re just independent variables and you think you’re making a point but you’re actually not?

Teams in cities where it’s warm and spouses want to live also have an advantage over Edmonton and Winnipeg, for example, but there’s no causal link between the weather and tax advantages, just like there’s no causal link between which teams generate the most revenue and can afford to pay salaries up front and which have tax advantages.

Yes Toronto has an advantage over other clubs with its ability to back up dump trucks of cash on demand, no it has absolutely nothing to do with Vegas’ tax advantage.

How can it really be fair if Toronto is printing money? Canadians want fairness, right? Or is it that they just like to complain and Florida teams are the easy scapegoats?

 

[HockeyScotty]

Someone has yet to explain to me why the mythical income tax advantage affects the NHL, but has absolutely no effect in other leagues like the NFL.

Because the MLB and NBA each only have 1 team in Canada; 0 for NFL and there are 7/32 in the NHL.

Also the NHL has the hard cap, while other leagues have soft caps/luxury tax.

Completely different economics between the "big four" sports; with the NHL teams/players fighting over scraps and the incremental impacts of tax on those scraps. (Scraps being comparative to other pro athlete salaries of course not regular people salaries).

Whether or not it is a real impact is another issue.

I would think weather and personal freedoms (avoiding intense media scrutiny) are just as likely causes for why players prefer certain places to play and "sign for less" to be there.

 

[triggrman]

Make the cap based on actual salary after reductions from income tax.

If someone was looking to be paid 5 million a year, it is easier for an owner to find 5 million in a zero taxed area then it is for a owner in a place that has a high income tax that is like 40%. It is nearly a 3-4 million per year difference.

There's no such thing as a zero tax state, whyt do you guys say things like that. Everyone pays Federal income taxes, up to 35%. Some states have up to 13% income taxes as well. No one is paying a 30% state income tax on top of their. States with 0 income taxes generally have higher sales and property taxes.

 

[CraigBillington]

This is great news for Canadian hockey fans, you have a built in excuse for your years of failure. Always someone else's fault.

As a Canuck fan, it's definitely not the income tax that's the problem. Years of organizational failure

 

[Goose]

How can it really be fair if Toronto is printing money? Canadians want fairness, right? Or is it that they just like to complain and Florida teams are the easy scapegoats?

All I said was that it is an advantage, which it definitely is. And with the CRA's willingness to target high-profile athletes, there is now an additional tax disadvantage in Canada.

The CRA wants an extra 8 million from Tavares.

Do you think there's any athlete out there who doesn't care about an 8 million dollar tax difference?

I agree Toronto's ability to pay massive sums up front is also a big advantage, but again, what does one have to do with the other? If people are whining about fairness, go take it up with them.

In my post did I say it was unfair or that things should be changed? No.

I personally don't care much. If the league does something about it, fine, if they don't, also fine. Same for stopping teams like TO from paying out salary up front as bonuses. Okay, whatever.

 

[Bear of Bad News]

It's Friday, folks. Have a good weekend.