There has never been any proof there pro athletes pay personal rates in Canada (and probably not the US). Never hear about MLB or NBA players demanding salary premium for tax reasons in Canada. But on hockey sites it seems to be an issue due to the published personal tax rates.
Salary Cap (Taxes)
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DistantThunderRep
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42% is 5% higher than No State Tax states. So according to you, on a 10 AAv signing bonus heavy contract, 500k is the difference. Much different than the millions in difference that keeps being spewed.
Also setting up residency, while difficult, is massively easier for professional athletes. A normal NHL player spends half the year playing, longer if they are in the playoffs. They are pretty damn close to the 183 days they need to not be home, if not over. As long as they don't own a house under their name or anything anywhere, they can claim residency in the states. Other factors need to be considered, but it's not like massively difficult and impossible thing to set up considering the millions a player would make.
It's like you are saying that if you weren't making millions a year, you wouldn't do everything humanly possible to avoid paying all the taxes.
DistantThunderRep
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Those sports don't have rabid Canadian fans. Well they will now because of the Raptors. Once that bandwagon is full, taxes will come up for Toronto.
You haven’t done it. I haven’t done it. But actual accountant with actual clients who do this say it’s not easy.
An accountant says that players often can’t do it long term.
It’s not as simple as crossing the border. You have to prove that your ties are stronger to the states.
Canadian wife who works? Kids in school? Going to play in championships or olympics.
You don’t know. I don’t know. But a person who filed taxes for NHL players who make millions says it’s not easy and most don’t
DistantThunderRep
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From Capfriendly:
Residents:
- All players are assumed to be residents of their local region
- Washington: The majority of Capitals players reside in Virginia (where the practice facility is located) and are therefore considered Virginia residents for state and city taxes
- Philadephia: The majority of Flyers players reside in New Jersey (where the practice facility is located) and are therefore considered New Jersey residents for state taxes
- New York Islanders: The Islanders practice on Long Island. The players do not live in New York City and therefore are not subject to the NYC city tax rate
- New York Rangers: The majority of Rangers players live outside of New York City and therefore by default we do not incorporate the NYC city tax rate
- Federal Jurisdiction:
- American residents are not subject to Canadian taxes; therefore, duty days while in Canada are taxed at their local rate
- Canadian residents are not subject to American taxes; therefore, duty days while in the USA are taxed at their local rate. The current exchange rate is used to convert the respective income to CAD to estimate the tax rate (because all players are paid in USD)
- State/Provincial Jurisdiction:
- Provincial: Residents in Canada are not subject to "jock taxes" and therefore are taxed at their location of residence (assumed to be their teams home province)
- State: Residents of American teams are subject to "jock taxes", and are therefore taxed for their duty days at the local jurisdiction.
- Medicare Tax: Flat 1.45%
- Medicare Surtax: 0.9% on income above $200,000 ($250,000 for married players: for this calculator single is assumed)
- Social Security: 6.2% for income ranging from $0 - $132,900
Hence why it's filled with the word "assumed" in almost all of the disclaimers.
Raptors don't have rabid fans? One of the best attended home arenas. Raptors fans attend many games in US cities close to border. Sorry if you haven't been paying attention to the NBA.
Your statement makes no sense. The more fans that attend Toronto games...the players taxes will rise. Sure.
Lowry's 33m salary is subject to the same taxes whether 18,000 attend games or 7,000.
DistantThunderRep
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Orrrrr maybe because it's hard to expect a kid who grew up in California, to play basketball in -30 weather for half the year. It's like, hear me out, it's not about the money sometimes, it's about location and quality of life.
DistantThunderRep
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Not like the Leafs. I'm not saying they aren't rabid, but can you imagine if the Leafs were in the cup finals at the same time?
Except. LIKE the actual accountant says. Most of the clients DO end up being taxed like locals long term.....
That’s the point. People think “oh just have a condo in Florida and it’s all the same”
Cap friendly is one of MANY peices If evidence. Including statements from agents. Players
Presidents. And accountants.
Toronto montreal and Ottawa are at a huge disadvantage
It’s a known fact presented by actual professionals.
Just because you and I don’t know all of the ins and outs. Doesn’t make the pros wrong
Yep that’s true too. Of course it is. No one is saying that other teams are ONLY there for the advantages.
Players can choose to go where they want. Even if the taxes were the same I’m sure many would pick Tampa over Toronto.
Less media. Good weather. All kinds of things. I think you would have to be crazy to come here.
That’s not the point. The point is that there is an artificial cap that champions parity and cost
Certainty. But then it allows for a pretty big advantage
Boo hoo the leafs pay more taxes what about all the sponsorship opportunities u guys tried forcing down stamkos throat? Not every team has that luxury. Maybe you just aren't as popular of a destination as you'd guys like to think?
DistantThunderRep
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And Mike Milbury is a hockey analyst. He must be the end all and be all of hockey knowledge since he is on TV.
Or sometimes, some people aren't good at their jobs or some others know other ways. Just like how no 2 GM's are the same, no 2 refs, and no 2 coaches.
You're just being obtuse. When something as complicated as taxes are involved, it's not just black and white like you make it out to be. If that was the case, then explain why LeBron left Miami? Or why no complains about the Cowboys? You would imagine the difference on 40 million a year contracts would be 10 million difference according to your TSN math?
Like we've been saying. There is an difference and there is an advantage, but it's not as big as you think. Why is it so hard for you to understand that?
Leafs fans are rabid through good and bad....But really you should follow the Raptors, They have to to be in top five maybe even higher for rapid fans. Sold out games, travelling fans.
But getting back to taxes. Personal tax rates are constantly made as the bible as the for take home pay. Pro athletes, entertainers and other professions can shelter much of their salary in trusts....and not pay personal taxes when they earn their salary.
Umm? You are being obtuse.... countless professionals who do this for a Living with million dollar jobs and clients repeatedly say this.
You just don’t want it to be true. It is a clear and accepted fact that you don’t like. So “it’s too complicated”
No one is saying EVERY player ever will take it.
But it’s a clear competitive advantage. That allows teams to take advantage. And they have.
Not every player will take it. “Lebron left miami” so tax laws don’t exist?
This is getting sad. Actually look it up. Actually research it.
But you won’t because you don’t want to admit the clear and obvious truth
DistantThunderRep
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Here, directly from the Canadian website.
Non-residents of Canada - Canada.ca
I maybe wrong, but Matthews would be considered a non-resident of Canada. Meaning he would only get taxed on the salary he made, $700k USD.
Non-resident tax calculator
That is the calculator from Canada Revenue website. If he does fall in line as a Non-Resident of Canada, meaning less than 183 days, no family here living with him, foreign drivers license and passport, doesn't own a registered car here or property, he only pays 25% tax on his salary.
Someone like Tavares, probably isn't considered a resident anymore since his family moved to Toronto.
American players who sign huge signing bonus contracts in Canada can have a massive advantage playing in Canada. Due to eliminating the personal tax in the province they play. Screws us, the Canadian people over.
Sorry to the last line.
Yes there is an advantage. I believe it is as big as I think. Because that’s what industry professionals have shown. I think it’s as big as they say it is. It’s not my opinion. It’s the best knowledge we have that has NEVER been refuted by credentialed industry professionals.
“It’s not as big as you think” based on some people not taking advantage of it. And a poster who while probably very good with numbers....
Just made up their own calculations with no experience
You cling to that because you want to.
NO ONE is saying that Tampa is only good because of tax advantages. They have drafted well. No tax advantages let’s you pick kucherov in the third round.
NO ONE is saying that. The ONLY reason players stay is for taxes. I think stamkos would be crazy to play in Toronto. Florida can’t get fans. You think players want to play in an empty building
Mike weaver hosted radio here for a bit. played in Florida and Montreal. He much rathered montreal. Even with the taxes.
What the experts are saying. Is that tax free states allow for a competitive advantage that allows
Them to offer the same money for less cap.
And it is as much as has been said.
Regardless of fan calculations
One. I’m. Not a tax expert. Those things are all true I’m sure. But the point is that in practice
According to an NHL accountant who has
20’clients. His clients end up paying 42%.
It’s not for me to say how all that happens. But that’s what pros are saying.
I mean even that. Can’t have a Canadian partner or live with someone. Can’t have a house or a car. Can’t have kids in school.
DistantThunderRep
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42% is 5% higher than a tax free state. Just using basic math if you want to simplify to 42% means that unless a player is getting $20m a year, the difference wont be 1 million a year on AAV. Which is exactly what we are saying.
Everyone points to the Stamkos situation. Where Toronto Sports Network kept pushing that Toronto had to offer 10.5 to match Tampa's 8.5. Well what people fail to mention is that they did that math not including or mentioning the 8th year. They took the total contract and included the tax advantage. Looking at this way, it's exactly what we have been saying that you keep dancing around. Yes, it's an advantage, yes it exists, but it's not millions in cap saving.its closer to 1/3 of what the Toronto Sports Network keeps saying.
No? It’s 53%. That is the tax rate. It is not 42%. There are SPECIFIC scenarios where some players MAY be able to take advantage of different rules.
And all of those rules have a significant toll.
For example. Like you pointed out.
1.) the days as a minimum. Remember he isn’t working in the states the money is Canada’s. Until proven otherwise. He plays in a division where he plays half his year in Canada at home. PLUS Ottawa and montreal. Playoffs. World championships etc are an issue j
2.) to get to the 43% you have to put money in RCA. Totally tie it up for what. 20 years minimum?
What’s the point of front loaded contracts then? Money now principle. Well not for Matthews.
3.) not being able to have a partner. Own a house. Buy a car. I’m sure a multi millionaire wants to Uber.
Even a 4 year lease could be an issue? Who knows? Not you. Not me. The pros.
Meet someone in canada. Who has a job? Can’t do that. Sorry I’m going to Arizona for 4 months...... fly down on weekends.
4.) AND you can get potential investigation for back taxes. Or the govt can come after you at any time. The govt can change their mind and still tax you.
Even AFTER jumping through All these hoops. You are STILL worse off than Tampa. Great deal.
The Most important thing is that even IF you were able to make it even. Which you can’t in Canada. But let’s pretend. You are still worse
Off tax wise. Not because of the basic rates. But all the other ADDITIONAL deductions beyond it. Like mortgage, agents fees etc. A
We are just talking about the tax rate. There are even more deductions.
That’s where some are missing it.
Like when people say stamkos was better off taking the lightning offer.
He would be saving about 1.25 million just in pure taxes per year. That’s what we are talking about.
That’s the systemic inequality that needs to be addressed.
Others are also calculating all the other deductions. That’s why it would be more. I’m not talking about those. But they are.
You keep saying it’s ‘not as much’. There is no proof at all. You just don’t want it to be true.
Even the guy who was making fun of cap friendly eventually agreed.
On a 10 million contract a Tampa player
Makes 1.25 million more than a Toronto player.
As per rates.
Then they get additional deductions which make it even bigger
If the salary cap was instituted to level the playing field between big market/small market teams, it should stand to reason that there should be a salary cap adjustment made for every team depending on state/provincial and federal tax rates. Teams such as Tampa and Florida have an advantage over everyone and American teams have an advantage over Canadian teams. Goes against the spirit of a cap.
Machinehead
HFNYR MVP
What small market teams have been successful in the cap era?
Pia8988
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