Should the NHL salary cap adjust for local income tax?

[Gnashville]

I'm pretty sure the Steven Stamkos $8.5M cap hit took tax dollars into effect when looking at offers?

Two years later and it’s still a big deal that Stamkos stayed in Tampa. He could not possibly like playing in Tampa and the added advantages of an extra year and the Lightning’s exclusive negotiation rights had nothing to do with it.

 

[BM14]

Yes. f*** the poor teams. Don't like it? Make your brand successful.

 

[boredmale]

MY 2 cents is what they should do is allow the NHLPA to tax the players so taxes are equal across the board. the NHLPA can then use that money how they please(pensions, redistribute it to players, etc)

 

[Gnashville]

Yes. **** the poor teams. Don't like it? Make your brand successful.

How does playing in a fiscally responsible city/state have anything to do with brand?

 

[BM14]

How does playing in a fiscally responsible city/state have anything to do with brand?

You won't piss and moan at having to pay more of a salary to the players vs areas with lower taxation rates.

 

[NORiculous]

Thank you. So few people realize this.

How do so few people reslize this? That’s the main point of having a cap!

 

[ottawa]

Can the NHL make each city the same level of desirability to live in while we're at it? Let's take Winnipeg and airlift all the land next to San Diego!

How would hey do that?

 

[RandV]

Two years later and it’s still a big deal that Stamkos stayed in Tampa. He could not possibly like playing in Tampa and the added advantages of an extra year and the Lightning’s exclusive negotiation rights had nothing to do with it.

I wasn't highlighting the point that he stayed in Tampa, rather that he signed there for $8.5M when other teams were probably ready to offer $11-12M on the free market. And remember that he signed only two days before free agency. It's good work by Yzerman as well, but I'm pretty sure the tax effect was taken into account when coming to that number, where an $8.5M offer from Tampa was the same as a $10M offer from Toronto, or something like that.

 

[Sensung]

Would be great if for no other reason than for Yzerman to lose his "genius" status.

 

[mouser]

I'm pretty sure the Steven Stamkos $8.5M cap hit took tax dollars into effect when looking at offers?

I’m sure it also took into account keeping the same home, staying with a team you’re both familiar with and played with your entire professional career. Oh, and that’s a pretty darn good team Stamkos re-signed with, better then the Leafs.

The Toronto media blew up the whole tax thing as the only reason Stamkos could possibly ever not sign with the Leafs. Ignoring all the other reasons why Stamkos, like most elite players, might prefer to stay with his current team in Tampa rather then leave as a UFA.

 

[mouser]

I wasn't highlighting the point that he stayed in Tampa, rather that he signed there for $8.5M when other teams were probably ready to offer $11-12M on the free market. And remember that he signed only two days before free agency. It's good work by Yzerman as well, but I'm pretty sure the tax effect was taken into account when coming to that number, where an $8.5M offer from Tampa was the same as a $10M offer from Toronto, or something like that.

He had to sign before free agency on July 1st if he wanted the 8 year deal. When the clock ticks on July 1st Tampa could only sign him to 7 years.

 

[WillNy29]

If taxes were that simple sure.

There are tax treaties between countries and you get taxed differently in every different jurisdiction. The straight across "tax analysis" that they show in the media when it comes to signing is bologne. Take it from someone who has worked in tax, you would be surprised at the amount of tax credits and deductions available in these high tax areas (Ontario). There is a specific tax treaty that applies to athletes known as the jock tax (also applies to celebrities).

Another thing is the CRA may deem you a Canadian resident if it believes you have primary ties in the country (parents, spouse, place of dwelling, bank accounts etc) in which case you are to pay taxes on all world wide earned income including income earned in Florida for example).

Every single player and/or team employs a very smart tax accountant/tax lawyer who has already minimized all players tax burdens to the minimal possible. Its highly likely that taxes dont even make a large enough difference to be material in making decisions if you have a well educated agent.

That only income taxes...lets not forget property taxes and other levies.

Another misconception in Ontario atleast is that if you're in the highest tax bracket you pay taxes of 40 some odd %. That's not true you pay taxes in a tiered system which creates a marginal tax rate (a lot lower than 45% or whatever the number is this year)

 

[Dr Robot]

As willny above me noted there's more details than just state income tax. Florida still has a state government that actually gets paid. No income tax states usually have much higher sales and property tax to compensate so you are still paying, just not in a form thats easy to cry about. Also players will as previously noted, pay jock taxes or basically income taxes in other states they earned income in. This stuff is brutally complicated and with the new US tax code coming out next year no one knows if its going to get more or less complicated. Simply looking at state income tax to determine how much players are paying in taxes is the equivalent of looking at +- to see how good at defense they are.

 

[204hockey]

the only reason they wont do this is to have stronger teams in the less taxed cities wich all happen to be southern markets.. coincedence? gotta grow the game some how down there!

 

[Spazkat]

I wasn't highlighting the point that he stayed in Tampa, rather that he signed there for $8.5M when other teams were probably ready to offer $11-12M on the free market. And remember that he signed only two days before free agency. It's good work by Yzerman as well, but I'm pretty sure the tax effect was taken into account when coming to that number, where an $8.5M offer from Tampa was the same as a $10M offer from Toronto, or something like that.

So are we going to take into account the currency differences as well since we're talking "effective dollars" essentially? Due to the exchange rate and the fact that contracts/salaries are USD but are paid in CAD? Because with the current exchange rate 8.5M USD is 10.637M CAD

Or does that not count since it sort of negates the argument.

On that topic - Seems like we would also have to adjustments to compensate teams that play a lot of games in high tax areas vs teams in low tax areas as well if we're following this model no?

 

[ziggyjoe212]

Having an internal budget is an organization's choice (albeit based on their finances). State tax is an imbalance in the system. Not comparable.

Imbalance in the system? Well so is weather, team success, appeal of the city.

Not every city can offer the appeal of playing with McDavid or Crosby, or the weather of LA/Miami, or the city life of Manhattan.

 

[Harvey Birdman]

The tax man gets you no matter what. Whether its through income tax or sales tax. Look at Tennesse for instance. The residents of Tennessee did not want income taxation to the point they modified their state constitution to essentially ban them. But they did this knowing that there will always be climbing sale taxes. They have a state wide 7% sales tax, as well as local districts can impose their own sales taxes on top. While it may not show up directly in the bottom line, they always get you. Now one can argue that then said person just takes their money else where to spend it, where sale taxes are cheaper. Especially someone of a millionaire means that can freely travel when not dealing with their occupation. But that's a ability they have due to their income. Personally, myself being someone that does not have that means to travel freely like that. I would rather have a high sales tax, and have control over what portion of my money gets taxed by the purchases I decide to make or not make. Than be blanketed with someone that could live right across the street from me, earn the same amount as me, and gets taxed almost identically to me even though we have completely different spending habits. Right now I live in California where taxation is insane, I pine for the day I can move back East. As far as adapting the salary cap to taxation. It would become an absolute nightmare. Introducing numbers that have the ability to change depending on state representation and/or voting with numbers that already change every year in a currently complicated cap system. No thanks.

 

[Mayor Bee]

No, it starts a slippery slope. There are so many factors players use to decide where to go. Ya a team like Montreal has high taxes and New York has a high cost of living, but in general those teams with cons, have a lot of pros for the players too, one of which is local sponsorship and ad deals. Stamkos for example could have made more money in Toronto than Tampa despite the tax difference, but that probably came with added pressure, time commitments, and other things. There are so many factors, and that's what makes it great. Individual players can seek out what works for them.

Plus other factors get involved too. Are property tax rates considered, or local tax rates for where players live? If a team is expected to offset taxes and take that into consideration, do they pressure players to live in a lower-tax suburb instead of a higher-tax one?

 

[westc2]

Would you adjust for the cost of living in each city too? What about sales tax? Property tax? Changing tax rates? Should players get a bonus to their salary for going to a bad team?

This would just make things way too complicated.

 

[ElLeetch]

How do so few people reslize this? That’s the main point of having a cap!

because most people think the cap is "to make sure rich teams dont spend too much" or to "make teams evenly talented" or "prevent dynasties"

 

[snopro31]

No.
If anything they need to cut the cap in half so these over payed entertainment pieces actually play for the game.

 

[GreatSaveLuongo]

Why dont we unify the currency while we're at it?

 

[SotasicA]

MY 2 cents is what they should do is allow the NHLPA to tax the players so taxes are equal across the board. the NHLPA can then use that money how they please(pensions, redistribute it to players, etc)

The traditional way would be for the PA execs to just pocket the money... Alan Eagleson - Wikipedia

 

[Gnashville]

Should we also account for buying power of Canadian money 10 million US dollars equals 13.7 million Canadian?

 

[theoriginalBCF]

Certain places have minimal taxes and others have high taxes. For some star players this could be the difference of over a milion for income per year.

Should the cap be adjusted for post tax income instead of pretax income?

This would get rid of advantages teams from areas with barely any taxes for signing free agents.

On one hand it creates more parity, on the other hand it slightly complicates things.

Wow... this is a really unique idea? It definitely gives some teams an advantage. Taking that away... yeah I think the Salary Cap should take this into account. It would create a completely level field and maybe players wouldn't be so inclined to go where it makes the most hockey sense.