Salary Cap (Taxes)

[Master P]

The truth was staring us in the face the whole time!

 

[pcruz]

Just curious if someone can explain salaries and how they pertain to the salary cap regarding players in Toronto vs say TB.

Read somewhere where all players are paid in US dollars but because of the higher taxes in Canada are we not at a disadvantage when signing players.

I’m a Leaf fan and not crazy about the Marner deal nor Matthews. But are we paying higher salaries to justify the taxes. If so how fair can that be in a salary cap world?

I wouldn't be too concerned for Matthews and his salary with regards to taxes. The overwhelming majority of his income comes in the form of a signing bonus on July 1st when he's not in Toronto.
He would pay Arizona state income tax for nearly all of his salary.

The Leafs aren't paying higher salaries to Marner, Matthews, Nylander, and soon to be Rielly and Andersen because of the income tax. The players will likely not even consider that as part of their decision on whether to play in Toronto or anywhere else.

Nobody wants to go to Edmonton or Calgary, yet their tax situation is far more advantageous than Toronto.
New York never has issues with being in the mix for top end Free Agents, and not only are their taxes on par with Toronto, the city has an extra tax, and the cost of living there is even higher than Toronto.

Whoever has convinced you that Stamkos didn't come back here because of money has you fooled.
One could stay here and pay 50% tax on their salary, and then more than make up for it in endorsement deals throughout the city/province/country, or they could go to Dallas, not pay state income tax and be nearly irrelevant in the community.

The disadvantage is a myth, and sadly it gets perpetrated ad nauseum.
It needs to die a quick, painless death.

 

[DistantThunderRep]

The truth was staring us in the face the whole time!

I vote for this to be our new logo. This is brilliant.

Edit: I'm stealing this for my profile picture. Not yet but I will.

 

[TaLoN]

The decline of the west began when people stopped thinking of paying taxes as a patriotic civic duty to better the communities they live in.

People have been critical of taxes for much longer than you think.

 

[Legion34]

Where, bring it up? And how is sponsorship and endorsement money not circumventing the cap? That's money teams, specifically the leafs, use in their pitches to get players to take less. Just because Matthews and Marner didn't do that, doesn't mean the leafs haven't been doing that and using that tactic.

And if it was such a huge advantage, explain why other teams who have the same advantage (Nashville, Florida, Dallas, Vegas, and soon to be Seattle) don't get the same discount on contracts or slack from Leaf fans? Where was that discount when Vasy took 9.5 million, or Bob took 10? The only time this becomes an issue is when Leaf fans and Leaf media whinge that their GM is handicapped by his own incompotence.

It’s literally like 2 pages before in this old bumped thread. Tampa fans were clearly proven wrong. Agents. GMs accountants. Players. All say it.

In fact Ron Francis even talked about how having his AHL team in a tax free state will help. Think about that. AHL salaries are still a distinct advantage. He specifically mentioned it on 31 thoughts interviews. Imagine the break on 10’millon if 700k is a big difference.

The salary cap governs the play on the ice. Not endorsements. You don’t get endorsements from the team or the league. That’s not HRR. But hey. Even IF they want to make an endorsement cap. Fine. Just make it fair

You are assuming that it is “Toronto fans” and media who are talking about it.

the athletic article was a MONTREAL accountant with 20 NHL clients. He went through scenarios for montreal players.

players like methot and petry etc were not from Toronto. Their agents who went on the record had nothing to do with Toronto.

tampa doesn’t get it any more than anyone else. They signed. Big players for less. Nashville and Vegas and Dallas are all discussed equally.

you just pay attention to your team. Which is understandable. But flawed.

 

[Legion34]

I wouldn't be too concerned for Matthews and his salary with regards to taxes. The overwhelming majority of his income comes in the form of a signing bonus on July 1st when he's not in Toronto.
He would pay Arizona state income tax for nearly all of his salary.

The Leafs aren't paying higher salaries to Marner, Matthews, Nylander, and soon to be Rielly and Andersen because of the income tax. The players will likely not even consider that as part of their decision on whether to play in Toronto or anywhere else.

Nobody wants to go to Edmonton or Calgary, yet their tax situation is far more advantageous than Toronto.
New York never has issues with being in the mix for top end Free Agents, and not only are their taxes on par with Toronto, the city has an extra tax, and the cost of living there is even higher than Toronto.

Whoever has convinced you that Stamkos didn't come back here because of money has you fooled.
One could stay here and pay 50% tax on their salary, and then more than make up for it in endorsement deals throughout the city/province/country, or they could go to Dallas, not pay state income tax and be nearly irrelevant in the community.

The disadvantage is a myth, and sadly it gets perpetrated ad nauseum.
It needs to die a quick, painless death.

you should really read up on the matter. Multiple agents. GMs players and accountants have all contradicted your point of view.

In fact Jeff Petry s agent did an article
About the decision to go to montreal vs Edmonton and how the tax scenario is a Huge part of the agents consideration and presentation to players.

Ron francis just went on 31 thoughts and said that he believed that putting the AHL team In Florida would be an advantage with bubble players and UFAs. Because of the tax advantages. In the MINORS. Never mind 10 million


Read up on. It. It’s actually pretty interesting. Here is one of about 100 articles I have found where tax advantages have been discussed. Of note. The agent mentions the huge tax advantages of Edmonton vs montreal. Jeff petry Is an American.

so that also shoots the whole american thing down too.

Americans in high tax states can do multiple write offs that Canadians. Can’t. The article concludes. That ontario and Quebec are by far the worst for taxes after considering the American deductions

Liberal tax hike on high-income earners could affect star athletes signing with Canadian teams

 

[pcruz]

you should really read up on the matter. Multiple agents. GMs players and accountants have all contradicted your point of view.

In fact Jeff Petry s agent did an article
About the decision to go to montreal vs Edmonton and how the tax scenario is a Huge part of the agents consideration and presentation to players.

Ron francis just went on 31 thoughts and said that he believed that putting the AHL team In Florida would be an advantage with bubble players and UFAs. Because of the tax advantages. In the MINORS. Never mind 10 million


Read up on. It. It’s actually pretty interesting. Here is one of about 100 articles I have found where tax advantages have been discussed. Of note. The agent mentions the huge tax advantages of Edmonton vs montreal. Jeff petry Is an American.

so that also shoots the whole american thing down too.

Americans in high tax states can do multiple write offs that Canadians. Can’t. The article concludes. That ontario and Quebec are by far the worst for taxes after considering the American deductions

Liberal tax hike on high-income earners could affect star athletes signing with Canadian teams

Matthews’ salary is very low. $750,000.
He would pay Ontario tax rates on just over half that. 41 home games + Ottawa visits.

The signing bonus is cashed in on July 1st. Offseason, while living in Arizona. AZ state taxes are 4.5%.
The newspaper article you provided said that despite Edmonton being a much more favourable destination, monetarily, Petry signed in Montreal.

 

[Creativero]

The bolded is a wrong hypothesis.

It was instituted for cost certainty.

https://en.wikipedia.org/wiki/NHL_salary_cap.
You seem pretty confident about the cost certainty thing but “ Like many professional sports leagues, the NHL has a salary cap to keep teams in larger markets (with more revenue) from signing all of the top players and extending their advantage over smaller-market franchises.“

 

[Windy River]

Tax differences are also overstated. Having lived and worked in both BC and WA state for many years, I found negligible difference in after ‘tax’ pay for given salary levels. I say ‘tax’ because although US taxes are lower in many cases, there’s also a plethora of other mandatory payroll deductions that never really made sense to me but net result is you don’t really see much more (if any) $ at the end of the day in the US.

 

[I Hate Blake Coleman]

Because why the f*** would anyone grant sports teams special status for evening taxes across the board? Pay taxes or GTFO

 

[tempofound]

If the Maple Leafs feel that they're disadvantaged, their ownership should look into relocating the team, perhaps to a low tax state in southern USA.

 

[markog]

Last winner with no state tax was Tampa in 2004, yeah those teams have huge advantage

 

[Pia8988]

https://en.wikipedia.org/wiki/NHL_salary_cap.
You seem pretty confident about the cost certainty thing but “ Like many professional sports leagues, the NHL has a salary cap to keep teams in larger markets (with more revenue) from signing all of the top players and extending their advantage over smaller-market franchises.“

it is all about cost certainty. Wiki was probably written by someone with less knowledge on the subject.

 

[wintersej]

People have been critical of taxes for much longer than you think.

I get your point but representation was a large part of that particular incident.

 

[FirstRowUpperDeck]

Why does every NHL Tax calculator just use local taxes?

Texas has 0% state tax and the calculator uses 31% as their rate, so obviously they are estimating all taxes, no? Agree it's hard to calculate real estate tax, maxed at 3%. Does player have a $1 or $500K home, for instance? And, housing is also more affordable in Texas.

Ran a few simulations between TX and Canada. Each came out under 10% difference. IMHO, enough for players to consider, especially those who are philosophically against paying taxes, as some people seem to be.

 

[TaLoN]

I get your point but representation was a large part of that particular incident.

Not as large a part as you think, that was mostly an excuse at that point... the straw that broke the camel's back so to speak.

The ultimate root cause was the expense of the French and Indian war cost both the British and the Colonies greatly. The tax on tea was just one in many to try to pay for those expenses.

These taxes were going to directly pay for the security of the Colonies themselves. The problem was, the Colonies had many local resources and they were often able to sidestep taxes by avoiding the taxed items. This is what led to the tax on tea. One item the Colonies could not provide themselves... and since the other taxes weren't working, the tax was unusually high... resulting in the uproar over so many taxes over so many years... (most of the previous taxes failed, but to the local people that didn't matter)

The British Empire didn't want other regions to pay for security of the local issue, so the taxes were on the Colonies only. Yet the locals felt no such patriotic duty to pay, which is the ultimate point here.

 

[wintersej]

Texas has 0% state tax and the calculator uses 31% as their rate, so obviously they are estimating all taxes, no? Agree it's hard to calculate real estate tax, maxed at 3%. Does player have a $1 or $500K home, for instance? And, housing is also more affordable in Texas.

Ran a few simulations between TX and Canada. Each came out under 10% difference. IMHO, enough for players to consider, especially those who are philosophically against paying taxes, as some people seem to be.

I think you last sentence is very important. For some players it really matters. For some players being close to where they came from matters. For some being in the bright lights matters. Some want the beach. Some want to win. Some just want to stay with their current team out of comfort. In the end, if taxes were everything I would think everyone and their mother would be moving to Alaska. They have negative taxes! But that’s not real life.

 

[Legion34]

Matthews’ salary is very low. $750,000.
He would pay Ontario tax rates on just over half that. 41 home games + Ottawa visits.

The signing bonus is cashed in on July 1st. Offseason, while living in Arizona. AZ state taxes are 4.5%.
The newspaper article you provided said that despite Edmonton being a much more favourable destination, monetarily, Petry signed in Montreal.

1.) that’s not how it works. Signing bonuses are not taxed where you cash the cheque. Otherwise every team could book a hotel in florida and pay everyone there.

Matthews as 1 example could maintain residency for a little bit and get some savings. But ultimately it will end up the same. There are also risks to SB.

2.) no one is saying that every playet only signs in low tax states. Of course not. What is being said is that

to offer the same player the same net value. High tax teams have to offer substantially more. Which is a systemic disadvantage.

montreal toronto and ottawa have to offer I think it’s 1.5 million more on a 10’millon AAV.

 

[CupsOverCash]

Oh muh taxes!!

 

[Krewe]

Won't anyone think of the poor leafs!!

 

[wintersej]

1.) that’s not how it works. Signing bonuses are not taxed where you cash the cheque. Otherwise every team could book a hotel in florida and pay everyone there.

Matthews as 1 example could maintain residency for a little bit and get some savings. But ultimately it will end up the same. There are also risks to SB.

2.) no one is saying that every playet only signs in low tax states. Of course not. What is being said is that

to offer the same player the same net value. High tax teams have to offer substantially more. Which is a systemic disadvantage.

montreal toronto and ottawa have to offer I think it’s 1.5 million more on a 10’millon AAV.

But only Toronto seems to pay extra. LA and NY don’t seem to. When the Habs made the offer for Aho they didnt. It’s just Toronto.

 

[Legion34]

But only Toronto seems to pay extra. LA and NY don’t seem to. When the Habs made the offer for Aho they didnt. It’s just Toronto.

1.) read the article. There are extra tax advantages such as writing off agents fees that all American teams can use that candian teams can’t.

LA and NYR are still way better off than eastern Canada and Ontario and Quebec are by far the most disadvantaged

2.) regardless of the tax scenarios being better in LA and NY. They still do in fact pay like the rest of the league. 14% for top star players is standard. Teams like Tampa get them for less

3.) the habs clearly DO offer and pay more. Look at Gardiner. He took less to go to carolina. Montreal paid 14% to price. Look at subban.

Montreal doesn’t have superstars. If they did. They would pay.

4.) acting like it is a “Toronto” paying more as a unique idea is just wrong.

NYR paid 11.63 to panarin. The isles offered more. Tavares took 2 million less than SJ offered per year and turned down the extra year from the isles.

look at the contracts of superstars.

1.) generational players. 16-17.5%

2.) superstars. 13.5-15%.

works for pretty much every team that isn’t tax free. Stars there take like 11-12.5

 

[Sky04]

Boston and Calgary aren't tax free and have all of their guys on great deals, maybe Toronto just has poor management

 

[JianYang]

There's no "one size fits all" rule regarding taxes and a team's ability to attract players.

Toronto for example could drive increased enorsement revenue for a star player on a local level than a place with low taxes like tampa. Some players may not care about taxes as much as others.

If we take a look at the rangers, which has been proven as an attractive market for players, the cost of living (which is the category I lump taxes into) is very high, yet players want to sign there.

The biggest deterrant for Toronto, and other Canadian markets using the Rangers as a case study is that you have to sacrifice anonymity. In new york, you get all the ammenities, and perks, while remaining a small fish in a big pond.

 

[wintersej]

1.) read the article. There are extra tax advantages such as writing off agents fees that all American teams can use that candian teams can’t.

LA and NYR are still way better off than eastern Canada and Ontario and Quebec are by far the most disadvantaged

2.) regardless of the tax scenarios being better in LA and NY. They still do in fact pay like the rest of the league. 14% for top star players is standard. Teams like Tampa get them for less

3.) the habs clearly DO offer and pay more. Look at Gardiner. He took less to go to carolina. Montreal paid 14% to price. Look at subban.

Montreal doesn’t have superstars. If they did. They would pay.

4.) acting like it is a “Toronto” paying more as a unique idea is just wrong.

NYR paid 11.63 to panarin. The isles offered more. Tavares took 2 million less than SJ offered per year and turned down the extra year from the isles.

look at the contracts of superstars.

1.) generational players. 16-17.5%

2.) superstars. 13.5-15%.

works for pretty much every team that isn’t tax free. Stars there take like 11-12.5

Your contradictions and jumps to conclusions are fascinating.

Aho chooses Montreal over Carolina. Doesn’t matter. Gardiner chooses Carolina after being in the microscope of Toronto and it’s proof. Players sign in Tampa for less. It’s proof! Tavares signs in Toronto for less. Doesn’t matter. Panarin signs in NY instead of Florida. Is Benn playing for low 13% of cap with no taxes in Texas out of line with Tavares at high 13%? The taxes shit is just so so so so so overblown. If it wasn’t, in all the sports Texas and Florida would dominate. And across all the sports they don’t even come close to higher tax places like Boston or California.