Should the NHL salary cap adjust for local income tax?

[BrindAmours Army]

No.

Presumably, higher tax rates lead to better governmental services.

By negating tax rate, you negate the fact that in areas where you pay more in taxes, the government has the ability to do more for you.

If you want to consider the variables that could influence a player's decision to sign in one team vs. another, you're going to need one hell of an actuary (or realistically, one hell of a team of them).

Relevant factors I can think of off the top of my head:

• Federal Income Tax
• State Income Tax
• Local Income Tax (if that is a thing anywhere)
• Sales Tax
• Property Tax
• Other assorted taxes
  
• Shittiness of Winter Weather
• Shittiness of Summer Weather
• Distance from an ocean
• Distance from mountains
• Value of recreational activities within x distance from team city
• Quality of education
• Air quality
• Home value
• Value of government services available in the area?
• Traffic
• Odds of forest fires
• Odds of hurricanes
• Odds of tornadoes
• Odds of earthquakes
• Odds of flooding
  
• What plant's can be/are grown in the area?
• Pet laws
• Laws restricting individual freedom
• Licensing requirements for [job desired] (the player's might not care about that, but their significant others might)
• Shittiness of local fanbase
• Degree of privacy to be expected
• Crime rate
• Amount of sales expected from licensed products
  
• etc.

If you want to control for local variables, you're going to have to account for much more than merely income tax, to the point where it would be impossible to accurately determine final values. And if you only want to control for income tax, you're ignoring the value gained or lost due to services provided from the income tax, as well as any and every other factor that will affect the desirableness of a team.

 

[Jumptheshark]

POP QUIZ


What is the max numbers of days an individual can spend in the US of A before the US tax system can tax their world wide earning?

you guys do know the USA has the tax law right?

 

[DownIsTheNewUp]

Great idea, the CBA isn't complex enough. Lets add the US and Canadian federal tax code, along with state and local tax codes for each team into the CBA.

 

[kook10]

The salary cap isn't about fairness anyway. It is about cost certainty for the owners. I am sure owners in low tax states have zero sympathy for teams in NY, TO, LA, etc. Until they start consistently eating away at playoff revenue for the rest of the bunch, the whole conversation is a nothingburger.

 

[WillNy29]

POP QUIZ


What is the max numbers of days an individual can spend in the US of A before the US tax system can tax their world wide earning?

you guys do know the USA has the tax law right?

Weve got sojourning in Canada at 183 days. If youre here for that long in a year your world wide income is taxed by Canada.

How are the residency rules in US?

 

[Jumptheshark]

Weve got sojourning in Canada at 183 days. If youre here for that long in a year your world wide income is taxed by Canada.

How are the residency rules in US?

does not matter if you are a residence of the USA or not--you spend X amount of days state side they tax ALL your income

 

[WillNy29]

does not matter if you are a residence of the USA or not--you spend X amount of days state side they tax ALL your income

We have that too with the sojourning rule but we also have residence rules where even if you werent Canada all year the CRA can deem you a resident (having a house in Canada, bank accounts etc)

 

[Lebowski]

Great idea, the CBA isn't complex enough. Lets add the US and Canadian federal tax code, along with state and local tax codes for each team into the CBA.

Why does the complexity of it matter to you? They hire people to figure it out.

 

[joestevens29]

Why does the complexity of it matters to you? They hire people to figure it out.

Probably because HFboards can't figure out a 10 page documents let alone something in the tens of thousands of pages

 

[tucker3434]

Why does the complexity of it matters to you? They hire people to figure it out.

Because paying CPAs and attorneys millions just so Toronto, Montreal, LA, and NY can pay their players more is never going to happen.

 

[BrettHullsToe]

Maroon just signed a cheap deal with St. Louis because he has a kid living there. I guess we need to put in a "family surcharge" as well? Something like, every family member within 50 miles adds 1% to your cap hit and an additional 1% for close family members.

 

[DownIsTheNewUp]

Why does the complexity of it matters to you? They hire people to figure it out.

The point is that it's not as simple as saying "9 million here is equal to 11 million there and 11.5 there" like people are making it out to being. There are hundreds of variables that go into how much a person pays in taxes. With the cap, it's hard enough for GM's to make trades in this league. Could you imagine them having to do a tax analysis for each player every time they tried to make a move?

"Well we can't sign Tavares this year, he just sold his yacht and his place on Long Island, so his capitol gains taxes are gonna be through the roof and blow through our cap tax offset."

 

[oobga]

I just want to give a shout out to Ryan Reaves for the discount he gave Vegas because of their lowest tax rates in the league

 

[MessierII]

We have revenue sharing. Why not?

 

[93LEAFS]

As a fan of a team who would benefit from this absolute.

As someone who is practical, this is not a realistic implementation. I assume the players would be signed to Net deals, instead of current Gross deals. A bunch of NHL owners isn't going to go anywhere near that. If a state like Florida suddenly decided to implement an average state income tax for high-net-worth individuals, it will put significant strains on that team. It leaves owners too exposed to state legislation changes. In some cases, they may luck out (for example, Ontario income tax should go down under Doug Ford), but it produces way too much volatility. Then there is the external aspects of it, where if taxes go up for rich people, they have less discretionary income, which may lead to less season ticket sales.

For example. Say, Florida implemented a 6% tax rate on individuals who earn over 200,000 a year, and the Feds increased that tax rate by a moderate 1.5%. For the Panthers that would add 6 million a year in expenditures.

At the end of the day, parity is how they sold the cap to fans, but anyone who was actually paying attention knows it was really about cost certainty. Tying taxes to players salaries removes significant cost certainty.

 

[ScaredStreit]

POP QUIZ


What is the max numbers of days an individual can spend in the US of A before the US tax system can tax their world wide earning?

you guys do know the USA has the tax law right?

As an American when I lived and worked in Toronto I had to file my earnings with the IRS and pay taxes on it. Any American playing on any Canadian franchise is required to do the same.

 

[WSS11]

How would your "gross/net adjustment" work, in the simplest sense, as between just two cities like Montreal and New York?

Would you look at the differences in the definitions of "income" under Quebec, Canadian, US, New York State and New York City tax laws as well as the various tax rates? If not, how would you compare similarly situated taxpayers if the amounts upon which they are taxed is not similar?

Are you thinking of accounting for differences in tax deductions, such as the US mortgage-interest deduction that is not available in Canada?

How about differences in the treatment of deferred income such as registered pensions, 401k's, RRSPs and other forms of retirement savings?

Let alone all the other differences in tax laws, what about just the tax rates? What is your benchmark? Do you base the Rangers on US federal and New York State tax rates alone, or do you also include the New York City income tax that applies to everyone who lives in NYC? If so does that also apply to the Islanders? What about the Ranger and Islander players that live outside NYC? Do you take into account the tax rate where they live, if that happens to be New York, New Jersey or Connecticut?

Consumption taxes are a big part of the actual tax load. Do you adjust for sales taxes, fuel taxes, road levies, property taxes, local improvement rates and the like; or the cost of health care, as to whether that is privately or publicly funded?

If what you're really looking for is "leveling the playing field", as it were, then you've got a lot of work to do. A simple adjustment to some arbitrary tax rate is incredibly simple-minded and won't in any way accomplish that, even in the unlikely event that effective adjustments to tax rates could be made across multiple jurisdictions.

Best of luck.

Wow, someone really wanted to puff their chest out. Never said a net gross system would be “simple” or that it wouldn’t be multifaceted. In all honesty, I’m not a CPA or anything so I’m not even going to try to post an elaborate plan on a hockey message board that would just get holes poked in it by the likes of you. Point being is that though it wouldn’t be a perfect system I’m sure the experts the NHL employs would be able to devise a system to level the playing field even on a broad scale.

 

[Bringer of Jollity]

Maroon just signed a cheap deal with St. Louis because he has a kid living there. I guess we need to put in a "family surcharge" as well? Something like, every family member within 50 miles adds 1% to your cap hit and an additional 1% for close family members.

Leafs fans still want to talk about the unfair advantages in attracting UFAs after "Blanketgate?"

The next big-name UFA the Preds sign with their no-income tax advantage will be the first.

 

[Howboutthempanthers]

The next big-name UFA the Preds sign with their no-income tax advantage will be the first.

Yeah, so will us. So will Tampa Bay. Dallas...

 

[Trafalgar Sadge Law]

Of course it should be, otherwise it gives low tax states/provinces a distinct advantage.

 

[Sol]

100% cap should be after taxes. It's unfair. Only people who don't have a problem with this are low tax or no tax teams who can spend to the ceiling.

You'd be illogical to believe the way it is right now is fair.

 

[MikeyMike01]

100% no

Places that have high taxes should suffer the consequences until they lower them.

 

[Sol]

100% no

Places that have high taxes should suffer the consequences until they lower them.

How is that the teams fault that the taxes in the state are high? Tf

 

[MikeyMike01]

How is that the teams fault that the taxes in the state are high? Tf

It’s not the team’s fault. However we can’t go around rewearing bad behavior, and high taxes are very bad behavior.

 

[Sol]

It’s not the team’s fault. However we can’t go around rewearing bad behavior, and high taxes are very bad behavior.

You're not making a point