Should the NHL salary cap adjust for local income tax?

[Tall Morty]

Source?

Touché

 

[KevinRedkey]

Florida tax break strikes again with the Kucherov signing.

We(leafs) will get this fixed in the next lockout.

It's the hill we'll die on.

You are not a Leaf, and the hill you die on has zero impact on the actual NHL. You're living in a fantasy land.

 

[sufferer]

No. We need to pretend Yzerman is some kind of demigod. It makes for quality reading.

 

[Critical13]

The Kucherov Signing thread has a lot of debate revolving around the "fairness" of tax impact in a salary cap world. What are your thoughts on it?

Here is a chart showing what 9.5 million per year earns a player in any given market.

• There is a $800,000 (15%) difference between Tampa Bay and Buffalo, who is middle of the pack.
• There is a $1,300,00 (25%) difference between Tampa Bay and Toronto, who is bottom of the pack.

Do you think this difference in earning potential gives some teams an advantage? Should this be an issue?

I know there are some on here with a lot of tax experience, and I have a feeling that the above statements are incomplete or lacking detail, so I am hoping someone can clarify.

 

[NyQuil]

I like how whatever is a current problem for the Leafs becomes a critical issue for the NHL.

When they were missing the playoffs by a few points, it was the draft lottery odds.

When they were losing in the shootout all the time, it was shootout points.

When it was goal review calls going against them, it was the whole goal review process.

Now that it's cap crunch time, it's the tax situation.

 

[BruinsBtn]

No.

The HF understanding of how NHL players pay taxes is laughably simplistic.

 

[Critical13]

I like how whatever is a problem for the Leafs becomes a critical issue for the NHL.

When they were missing the playoffs by a few points, it was the draft lottery odds.

Now that it's cap crunch time, it's the tax situation.

The first time I saw this argument was actually 4-5 years ago, not a new issue. Thanks for making this about your favourite team, the Leafs, though.

No.

The HF understanding of how NHL players pay taxes is laughably simplistic.

Let's hear it then, I actually want to learn. I know nothing beyond my own tax situation, never had much of a reason to learn how athlete's pay taxes. Not sure why that would be laughable.

 

[Eat The Rich]

https://hfboards.mandatory.com/thre...lary-cap-adjust-for-local-income-tax.2501657/

Don't we have this thread already?

 

[NyQuil]

The first time I saw this argument was actually 4-5 years ago, not a new issue. Thanks for making this about your favourite team, the Leafs, though.

Well, my team isn't in your chart so I had to improvise.

 

[joestevens29]

Toronto just signed the most sought after free agent, obviously taxes aren't an issue if they were able to do so.

 

[Agent Zuuuub]

No.

The HF understanding of how NHL players pay taxes is laughably simplistic.

What is the correct understanding?

 

[Razz]

I like how whatever is a problem for the Leafs becomes a critical issue for the NHL.

When they were missing the playoffs by a few points, it was the draft lottery odds.

Now that it's cap crunch time, it's the tax situation.

What a lousy post. Some of us legitimately want to know how taxes really work rather than mudslinging.

My guess is the difference isn't so great when you factor in what you can do with a good accountant and investments. That said, clearly players are signing under market value so there's certainly an argument to be made that taxes play a role.

 

[disgruntleddave]

No.

The HF understanding of how NHL players pay taxes is laughably simplistic.

For some people but not all. There are convenient calculators we can use to see what the final tax rate is for a player in each city based on their home games and away games etc.


Yes, there is a legit impact to the tax differences. It gives teams in low tax areas an advantage clearly. How big of an impact does that have on signing players, is not so straightforward, but surely it will have an impact.

Just like quality of life, cost of living, travel time, all have impacts to players. I'd be tempted to say that they should normalize pay against taxes paid, but turn it opens up the conversation for normalizing other things which are not possible such as the other points I mentioned.

 

[Critical13]

Well, my team isn't in your chart so I had to improvise.

I had to cut someone out, so I picked the team that doesn't need to worry about what the cap is...

 

[NyQuil]

What a lousy post. Some of us legitimately want to know how taxes really work rather than mudslinging.

Well how about we read this 15-page thread on the main board that was updated today.

https://hfboards.mandatory.com/thre...lary-cap-adjust-for-local-income-tax.2501657/

 

[New Jersey]

being a working class person getting by northern new jersey living a half hour from manhattan with the ultimate career goal of making just enough to retire in the same place i was born and raised (here), i find this whole discussion around millionaires who play a game for a living and how much they pay in taxes f***ing crass.

 

[kook10]

The tax effect is diluted because games played out of state are treated as income earned in that locality.

Income Taxes For Pro Athletes Are Reminder Of How Complicated U.S. Tax Code Is

 

[GoldiFox]

Players pay taxes in the states they play away games in. One could cluster divisions and determine average tax rates from a specific team's schedule, but it is likely just as simple to say that 50% of games are taxed at an "away" rate that averages out for each player to be about the same across the whole NHL. Cuts the benefit of the OP in half.

 

[qwertyaas]

Players get tax assessed for games played in other states as the income was earned in those states.

A simple charge of state and local taxes are not what the player pays. He pays each local and state tax based on where the income was earned - where the game is played.

Yes, for the home games, there is savings. But it's not as if Kucherov entire salary is under Florida tax.

 

[Goose]

being a working class person getting by northern new jersey living a half hour from manhattan with the ultimate career goal of making just enough to retire in the same place i was born and raised (here), i find this whole discussion around millionaires who play a game for a living and how much they pay in taxes ****ing crass.

I'm sure people living below the poverty line on food stamps find your discussion of retiring (something many don't do) in the same place you were born and raised ****ing crass. And people living in the third world who spend 6 hours a day just collecting water and watch their mal-nutritioned kids die from treatable diseases probably find the food stamp people complaining about food stamps ****ing crass.

It's all relative bud.

 

[StreetHawk]

You would be making the assumption that all players would factor in after tax amounts to their contracts.

That would be foolish as only a select few will get the structure contract that kuch receive with 58% of it in bonuses, along with trade protection.

To fit everyone comfortably under the cap, TB will have to trade other guys.

If killorn took a lower salary because he factored in taxes and he gets traded, he loses out.

Tax advantages only benefit the player if he is a member of the team in the low tax regions.

Once you get traded, those tax advantages disappear.

So, did any of Johnson, killorn, palat, girardi who have full ntc take taxes into account when they negotiated their contracts? If yes, what incentive financially do they have to waive their ntc to go to a higher tax team?

The low tax teams benefit by getting the top end 3-4 guys. But everyone else should be getting the max salary they can. If they get traded they make less money. Can’t ever assume to finish your contract with the same team.

 

[Critical13]

The tax effect is diluted because games played out of state are treated as income earned in that locality.

Income Taxes For Pro Athletes Are Reminder Of How Complicated U.S. Tax Code Is

So that means half the salary difference is real, at least. So if Ottawa needs to pay roughly 25% more than Nashville, the reality is closer to 10-15% depending on division and taxes for those states.

That's still 8 million more spent to overcome tax difference, isn't it? Or rather, 8 million less spent by teams that benefit.

 

[M.C.G. 31]

Taxes don’t matter if you build a winning culture that players want to be a part of. Toronto just signed JT who had more money on the table from other teams.

Not to mention they get paid in USD and have much more buying power in Canada.

 

[NyQuil]

I had to cut someone out, so I picked the team that doesn't need to worry about what the cap is...

Well, we're the worst team in the NHL as far as tax situation goes, for anyone playing at home.

 

[New Jersey]

I'm sure people living below the poverty line on food stamps find your discussion of retiring (something many don't do) in the same place you were born and raised ****ing crass. And people living in the third world who spend 6 hours a day just collecting water and watch their mal-nutritioned kids die from treatable diseases probably find the food stamp people complaining about food stamps ****ing crass.

It's all relative bud.

lol i got pwned.

if i have to be so faithful to the topic, i really am flabbergasted that this became such a hot topic for us fans in like, the last two years.

maybe my original post should have just been "who really cares? clearly high-tax jurisdictions don't stop players from signing for the f***ing rangers or bruins."

i also have views on the fact that we, as fans with day jobs, effectively pay similar tax rates as pro athletes, but i'd have to take that to the politics board.