Gnashville
HFBoards Hall of Famer
I still want a list of all these Free agents that have not signed because of high taxes
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Should the NHL salary cap adjust for local income tax?
- Thread starter jbeck5
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Canadian teams should have to use the Canadian dollar. 79.5 million USD cap = 60.2 million CAD cap.
HaNotsri
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- Dec 29, 2013
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Living costs doesn't really matter when you make 5 or 6 million yearly, a few % in tax does.
treple13
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- Sep 1, 2013
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The biggest free agent this decade signed with a high tax team. The biggest free agent last decade (Neidermayer) signed with a high tax team.
Also not NHL related but the NBA's biggest free agent just went to a high tax team.
But let's go out of our way to solve a problem that doesn't exist
Also not NHL related but the NBA's biggest free agent just went to a high tax team.
But let's go out of our way to solve a problem that doesn't exist
EspenK
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- Sep 25, 2011
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I was surprised that if Tavares had taken a 7 year deal from Tampa he would have made more net dollars than if he took the 8 year deal from the Isles. Same $ amount. This is based on a calculator I saw somewhere but can't find it right now. I'm not sure it was completely correct, because if I'm not mistaken state taxes are applied to where you earn the money rather than the state you live in and I'm not sure the calculator considered this.
Anyway the basic question still remain. Is it fair that teams in no/low state tax rates have an advantage over teams in states with high tax rates?
Probably not but the logistics of implementing it would be difficult.
Anyway the basic question still remain. Is it fair that teams in no/low state tax rates have an advantage over teams in states with high tax rates?
Probably not but the logistics of implementing it would be difficult.
Pestilence
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Gnashville
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Dr Robot
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- Nov 3, 2011
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We've had this thread 5 times in the last month. Every single time the responses fall in 2 categories. Fans of high tax teams say yes, everyone else writes essays on why it's a bad idea. Those essays kill the thread because the yes posters ignore them till they can't anymore. The thread dies, the thread gets posted again.
The salary cap isn't there to be fair and create parity. While that is a nice side effect, its to give owners cost certainty. If we are making special rules for states taxes, why stop there? Why not adjust salary cap for cost of living because of California? Why not lower teams from large cities cap because their city is more attractive to UFAs? Why not give Winnipeg extra cap because its a snow desert?
I thought it was deja vu until I read your post. I know that I have seen this thread before, at least once, maybe twice.
Spirit of 67
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Bones Malone
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It would be foolish for any of the non-elite 2-3 players on TB/FLA/DAL/LV to ever factor in taxes when negotiating their contracts.
In TB, it's fine for Stamkos/Hedman to do it, and if they acquire Karlsson, him as well.
In DAL, it would be fine for Benn/Seguin (when he extends). These are the corner stones of the franchise, so they stay for the long haul. Plus, they are likely to have NMC/full NTC along with big signing bonuses. That's also a cost to the team. The team is locked into the player so that player has to perform and the owner has to have the cash to pay the front loaded contract and signing bonuses before any revenue comes in.
But, look at TB's current situation of players who are the most likely to be traded if they can acquire Karlsson.
Callahan/Coburn have M-NTC, so they are the easiest to move. Callahan so far has been paid $2.2 million more in salary than his cap hit.
Then, the full NTC guys are Killorn/Palat/Johnson/Girardi.
If any of them factored in taxes, they will lose out on those tax benefits should TB trade them. That's why, if I was Johnson/Killorn, I wouldn't waive my NTC if the contract I signed factored in taxes, especially if that was part of the negotiations/conversations that the team and I discussed when hammering out the agreement. So, if the team uses taxes during negotiations, I personally fell that they should not expect a player to waive a NTC 3 years into a 5 year agreement.
Take Johnson, he extended while still a RFA, so he could have been dealt back in June without restriction. If that happened and his $5 million cap hit was very team friendly, he loses the tax benefit and his take home pay is going to drop from $3.1 million in TB down to anywhere from $2.4 million (in California/Ontario) to $2.8 million elsewhere. Over the life of his 6 year contract, that could be $3 million plus take home money.
The purpose of the cap is cost certainty for the owners. It has absolutely nothing to do with competitive balance.
CantLoseWithMatthews
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- Sep 28, 2015
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But when you talk about getting rid of the salary cap, small market fans talk about how it's unfair because they won't be able to compete with teams that can spend more. That's what I was addressing
stampedingviking
Registered User
Big deal.
What if your player lives in Sweden, Florida or Quebec in the off-season? Do we adjust for that too?
Some players make tax-free off-shore investments. Others invest in businesses that have deductable short-term losses in expectation for long-term gains. Some dont follow any tax-planning advice and pay through the nose no matter what NHL franchise employs them.
There are so many individual differences in the tax profile of high-income athletes that it is impossible to "level the playing field" on a tax basis -- even for players on the very same team!
I have a master's degree in tax law and, frankly, this is just a stupid, simplistic idea.
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