Should the NHL salary cap adjust for local income tax?

[phil7488]

It's a slippery slope. Yes, Texas doesn't have state income tax but we do have the 6th highest property tax rate for example. Income tax is just 1 component of how states make money. It's a little short sighted to just look at income tax. As others have stated, this doesn't even take into account cost of living and local taxes. I really don't think implementing something like this is going to all of a sudden make all the good FA's flock to teams in income tax holding states.

 

[Tom Brady]

Kucherov is making 650k a year more than Tavares even though he signed for less than 1.5mil per year. that's crazy.

 

[ManofSteel55]

This is ridiculous quite frankly. If we adjust for state/provincial tax and national income tax, then where does it stop? Cost of living isn't the same everywhere either, do we need to figure that in? Housing costs and taxes? Medical costs? College expenses (most players have kids who will go to college eventually). There is no way to make it 100% fair. I'm just glad we have a cap in place - yes, there are some places with a bit of an edge, but at least most teams are on a close to even playing field. It's not like the 90's where teams like Colorado could load up on superstars without fear of going over the cap - or the Rangers trying to and failing miserably, lol.

 

[tucker3434]

Kucherov is making 650k a year more than Tavares even though he signed for less than 1.5mil per year. that's crazy.

I can guarantee you, he is not. Tavares is more than covering that difference with endorsement deals.

 

[CokenoPepsi]

I can guarantee you, he is not. Tavares is more than covering that difference with endorsement deals.

What endorsements?

 

[CBJWerenski8]

Nope.

 

[Dr Jan Itor]

My initial reaction was 'no', but re-thinking it, in a salary cap world, it is a bit of a problem that a dollar in one state/country isn't the same as a dollar in another.

I think that there's probably a way to do it that makes sense and doesn't piss too many people off, but I'm not smart enough to figure it out.

Doing away with signing bonuses is probably a step in the right direction.

 

[MDCSL]

If you wanted to adjust for income tax, all you’d have to do is make contracts in after-tax dollars. Maybe Tavares gets 7m instead of 11, and mcdavid gets 8.5 or whatever, and min salary is 400,000 or something. Easy solution.

 

[tucker3434]

What endorsements?

Serious question?

 

[TGWL]

If you wanted to adjust for income tax, all you’d have to do is make contracts in after-tax dollars. Maybe Tavares gets 7m instead of 11, and mcdavid gets 8.5 or whatever, and min salary is 400,000 or something. Easy solution.

I fail to see how any of that is easier? Are you saying everybody is taxed at the same rate, or are you saying their salary hit against the cap is minus the income tax from that state, because if that's the case, it doesn't change a thing. You'd be better off going to Florida and trying to get them to raise income tax.

 

[CanadianPensFan1]

I can guarantee you, he is not. Tavares is more than covering that difference with endorsement deals.

I really think you dont understand what this thread is about.

 

[tucker3434]

I really think you dont understand what this thread is about.

I know exactly what this thread is about, enabling big market teams to spend more than everyone else under the guise of fair play.

 

[MDCSL]

I fail to see how any of that is easier? Are you saying everybody is taxed at the same rate, or are you saying their salary hit against the cap is minus the income tax from that state, because if that's the case, it doesn't change a thing. You'd be better off going to Florida and trying to get them to raise income tax.

I’m saying the teams guarantee the players x dollars after taxes, regardless of state/federal/whatever taxes. Now you’d have to adjust the salary cap to reflect that, but let’s say every player took 35% off their salary cap hit (this is just an arbitrary number), and you reduce the salary cap by the same number now every team is on even ground.


So say Mcdavid: he gets a 8.5m/year contract. If he gets traded, he takes home 8.5 every year no matter if he’s paying Edmonton or Florida taxes.

 

[TGWL]

So teams

I’m saying the teams guarantee the players x dollars after taxes, regardless of state/federal/whatever taxes. Now you’d have to adjust the salary cap to reflect that, but let’s say every player took 35% off their salary cap hit (this is just an arbitrary number), and you reduce the salary cap by the same number now every team is on even ground.


So say Mcdavid: he gets a 8.5m/year contract. If he gets traded, he takes home 8.5 every year no matter if he’s paying Edmonton or Florida taxes.

So if you take (using 35%) off of 12.5, you get 8.1 for McDavid. Guarenteed! Who pays the rest of McDavid's taxes, the team? I don't know if that's even legal. McDavid has to file for his 12.5 million, where the team would have to reimburse him, but that's just a mess.

What about prior situations where the cap his greater than the salary? Are cheaper owners now forced to pay additional money on taxes?

 

[Deegee]

Kucherov is making 650k a year more than Tavares even though he signed for less than 1.5mil per year. that's crazy.

Both get paid in American funds. Redo it with Tavares salary in American funds into the Canadian equivalent.

 

[Notsince67]

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.

No. A soft cap would be easier

 

[Deegee]

I know exactly what this thread is about, enabling big market teams to spend more than everyone else under the guise of fair play.

You're surprised the fans of the Leafs want some kind of advantage for their team over of other teams?

 

[Notsince67]

What endorsements?

Even Marner scored with an insurance company.
Tie Domi still does some spots every now and then

 

[Stand Witness]

If anyone is trying to argue a players take home just based off their marginal rate you are wasting time.

People have jobs in tax for a reason.

 

[Stand Witness]

Even Marner scored with an insurance company.
Tie Domi still does some spots every now and then

That has to be one of the more favourable endorsement deals too. On quite frequently during the end of the season for a fairly big company as well.

Actually one of the better done endorsements that isn't cringey, I genuinely laughed during it.

 

[Notsince67]

That has to be one of the more favourable endorsement deals too. On quite frequently during the end of the season for a fairly big company as well.

Actually one of the better done endorsements that isn't cringey, I genuinely laughed during it.

Here is another one

 

[MDCSL]

So teams


So if you take (using 35%) off of 12.5, you get 8.1 for McDavid. Guarenteed! Who pays the rest of McDavid's taxes, the team? I don't know if that's even legal. McDavid has to file for his 12.5 million, where the team would have to reimburse him, but that's just a mess.

What about prior situations where the cap his greater than the salary? Are cheaper owners now forced to pay additional money on taxes?

The team would pay the players income taxes, it’s no more money out of their pocket. If they were paying McDavid 12.5 and he paid the taxes, or if they paid him 8.1 and they reimbursed him his income tax amounts - same $ out of their pockets. And it would work the same way with cap hit/actual salary - maybe one year he makes 10, maybe one year he makes 14 - cap hit averages out salary changes yearly just like it does now.

Yes it would require teams to hire some accountants to figure out payroll but really that is pennies when compared to the amount of money they throw around.

 

[boredmale]

My initial reaction was 'no', but re-thinking it, in a salary cap world, it is a bit of a problem that a dollar in one state/country isn't the same as a dollar in another.

I think that there's probably a way to do it that makes sense and doesn't piss too many people off, but I'm not smart enough to figure it out.

Doing away with signing bonuses is probably a step in the right direction.

The easy fix to me is make a NHLPA tax that evens things out for all teams but all the money goes directly to the NHLPA to hand out how they seem fit

 

[tucker3434]

The team would pay the players income taxes, it’s no more money out of their pocket. If they were paying McDavid 12.5 and he paid the taxes, or if they paid him 8.1 and they reimbursed him his income tax amounts - same $ out of their pockets. And it would work the same way with cap hit/actual salary - maybe one year he makes 10, maybe one year he makes 14 - cap hit averages out salary changes yearly just like it does now.

Yes it would require teams to hire some accountants to figure out payroll but really that is pennies when compared to the amount of money they throw around.

Rich people don’t become (or stay) rich by throwing money away. You’ve got 31 owners to convince. So tell me why th either 25 or so are going to vote pay those costs in order to expand the other 6 teams’ cap?

Also, I think the complexity here is still being VASTLY underrated. People are looking at some oversimplified calculators and thinking there’s a simple solution. Professional athletes taxes are extremely complicated. Writing tax adjustments into each contract would be a nightmare (if even legal, I’ve never seen it).

 

[LeafFever]

While I do think it should be addressed, the non state tax teams are not winning cups. The higher taxed teams are. It's appearing to me teams with massive operating budgets are doing very well.