Should the NHL salary cap adjust for local income tax?

[glovesave_35]

We've had a thread on here (today) where people were seriously suggesting that Toronto not only sign Tavares to a wink-wink 9 year deal, but also include clauses guaranteeing endorsements as incentive to sign with the Leafs. Get outta here with this tired taxes argument.

Life is life. Some cities are attractive and some aren't. Some teams are attractive, some aren't. Let's quit with trying to completely level the playing field already.

 

[Sypher04]

yup.

Where does this idea come from? The cap is about cost certainty and nothing else.

Primarily yeah, but people who think the only purpose is cost certainty are thinking too narrowly here imo.

The cap being created most definitely was also partly result of there being a wide divide between the haves and have nots of the league

 

[Sypher04]

We've had a thread on here (today) where people were seriously suggesting that Toronto not only sign Tavares to a wink-wink 9 year deal, but also include clauses guaranteeing endorsements as incentive to sign with the Leafs. Get outta here with this tired taxes argument.

Life is life. Some cities are attractive and some aren't. Some teams are attractive, some aren't. Let's quit with trying to completely level the playing field already.

Yeah, I mean who wants economic parity. If a team chooses not to spend to a cap that's their prerogative but the system today says money in Tampa or other states with no state tax is essentially more valuable than elsewhere. Systemic issues that affect buying power should be corrected.

And you won't find many leaf fans who truly believe such a deal with Tavares would happen

 

[glovesave_35]

Yeah, I mean who wants economic parity. If a team chooses not to spend to a cap that's their prerogative but the system today says money in Tampa or other states with no state tax is essentially more valuable than elsewhere. Systemic issues that affect buying power should be corrected.

And you won't find many leaf fans who truly believe such a deal with Tavares would happen

In another post you mentioned finances and empirical data. Cost of living is empirical and that varies by city. It really has nothing to do with pro sports. If 9 million in Dallas lets you live better than 9 million in Toronto or NY, so be it. Lots and lots of people would take the equal money in the more expensive city for any number of reasons. And "Free" Agency allows them to do so.

You know how people are using the "going home" narrative for Tavares. Or how they used it for Stamkos. Or how they use it with literally any player from southern Ontario? How many "going home" stories do you think there are for places like Texas, Nashville, or Florida? How can we balance that out in the salary cap equation?

Also, whoever keeps mentioning that the salary cap was never intended to be about parity first and foremost is correct. The owners wanted cost certainty. The level playing field bit was just a by-product and something they could feed fans who they have screwed out of games twice in the last 14 years.

 

[GodEmperor]

The NHL should be an ancap league of sovereign citizens tbh.

 

[DudeWhereIsMakar]

I could be wrong, but as Illinois has the highest tax, they had Toews and Kane's contracts with bonuses paying off the taxes.

 

[Empoleon8771]

Why is it always Leafs fans starting these kind of threads complaining about taxes with the salary cap? Well, I know exactly why it is, but humor me.

 

[Sypher04]

In another post you mentioned finances and empirical data. Cost of living is empirical and that varies by city. It really has nothing to do with pro sports. If 9 million in Dallas lets you live better than 9 million in Toronto or NY, so be it. Lots and lots of people would take the equal money in the more expensive city for any number of reasons. And "Free" Agency allows them to do so.

You know how people are using the "going home" narrative for Tavares. Or how they used it for Stamkos. Or how they use it with literally any player from southern Ontario? How many "going home" stories do you think there are for places like Texas, Nashville, or Florida? How can we balance that out in the salary cap equation?

Also, whoever keeps mentioning that the salary cap was never intended to be about parity first and foremost is correct. The owners wanted cost certainty. The level playing field bit was just a by-product and something they could feed fans who they have screwed out of games twice in the last 14 years.

Cost of living isn't the problem. I've been very clear this whole time that I think cost of living has no place in this argument as it does not relate to the cap or taxes. This is for a number of reasons. 1) cost of living is what you do with your money AFTER you've made it, not what you make therefore it's outside the scope of the cap imo 2) cost of living is relative not only to state, or country, but the city as well... far too many variables. Point 1 however is really the beginning and ending of the argument though in my eyes.

The "going home" narrative, which I'd like to point out is mostly perpetuated by the media, moreso than the fanbase in a place like Toronto, and I'd imagine others as well, is also outside the scope of this argument. Because, the pull of a player perhaps wanting to return to their hometown to play hockey is not a financial matter, it's emotional.

As for the salary cap. Yes, as I said before, it's primary reason for existing was cost certainty but anyone who thinks the parity was just a happy bi-product is kidding themselves. Before the cap there was a lot of noise about the inability of budget teams (of which there were a lot) to compete. I think it's naive to think those owners were not actively looking for a solution to those issues as well and highly receptive to the cap for those reasons.

 

[4thTierSport]

Players don't just pay income tax to the state or province of their home team. They pay income tax in every state or province they play in.

Panthers players for instance pay California income tax for each day they play in California.

Huh? This seems entirely wrong on the face of it. Being a proffesional athlete and more working visas might make a difference but isn’t it based upon company (team) location and home addresses with some different states having reciprocal agreements. For example, PA residents only paying PA taxes even though they work in MD.

 

[Sypher04]

Why is it always Leafs fans starting these kind of threads complaining about taxes with the salary cap? Well, I know exactly why it is, but humor me.

I don't know about always, but being one of the highest tax markets in the NHL (second only to Montreal by a like 0.03%) it really shouldn't be surprising.

 

[pbgoalie]

I'm against this type of thinking, but Los Angeles, New York ,
And Anaheim just as a few examples, do have absurdly high taxes,
As well as very high cost of living

I do not know enough about other cities, but I know there are more

Seattle will bring in another no income tax team

Again, I'm against it. But in a cap situation, I certainly understand the thoughts on it.....
I had to deal with earning in multiple states and countries and the tax prep is a nightmare

 

[Sypher04]

I could be wrong, but as Illinois has the highest tax, they had Toews and Kane's contracts with bonuses paying off the taxes.

It's all still the same amount of money, tax and cap regardless of how they opted to pay it.

 

[SotasicA]

In Florida they would get to keep all of (or most of that 8 million)

Actually they get to keep $4,875,830 (minus agent fee etc).

Post-Tax Earnings Calculator - CapFriendly - NHL Salary Caps

 

[Sypher04]

I'm against this type of thinking, but Los Angeles, New York ,
And Anaheim just as a few examples, do have absurdly high taxes,
As well as very high cost of living

I do not know enough about other cities, but I know there are more

Seattle will bring in another no income tax team

Again, I'm against it. But in a cap situation, I certainly understand the thoughts on it.....
I had to deal with earning in multiple states and countries and the tax prep is a nightmare

Yeah, Florida, Tampa, Dallas, Nashville & Vegas all have a tax rate of 36.31%

Meanwhile, Anaheim, LA, San Jose, both New York teams, Montreal, Toronto, Vancouver, Winnipeg & Ottawa are 49% or more.

This is based on a $5,000,000 salary btw

 

[DudeWhereIsMakar]

It's all still the same amount of money, tax and cap regardless of how they opted to pay it.

Oh I do know that, what I meant is in places like Canada if you make over $1,000,000 the government could take half of that unless you were to own a business, as to which some NHL players do to avoid that, or do what PK Subban did and donate a huge sum of it to a Children's hospital. But when you think about it an NHL players salary is pretty much half of what they make so that's why they have bonuses, so that they can get their whole salary they signed up for and the bonus pretty much covers up what they have to pay in taxes.

 

[Crede777]

Huh? This seems entirely wrong on the face of it. Being a proffesional athlete and more working visas might make a difference but isn’t it based upon company (team) location and home addresses with some different states having reciprocal agreements. For example, PA residents only paying PA taxes even though they work in MD.

It's called the Jock Tax. Jock tax - Wikipedia

 

[Sypher04]

Hypothetical mystery player has the option of going to UFA:

TBL offers him 7x8.5
TOR also offers him 7x8.5

Over the course of that 7 year deal he would make $9,815,624 more in Tampa than he would in Toronto.

For the Leafs to match that deal they would have to increase their offer to just a sliver under 11.5 million per year

 

[DanM]

Although this would never happen, and taxes are a state, provincial, and or federal issue, it is frustrating.

The league went out of it's way to create parity, and I get why, but they totally neutered the advantages teams like NYR, MTL, and TML had when it came to being able to use it's financial might, and while we paid to help smaller southern markets on top of it.

Not saying we had proper management in place for years in Toronto when we could spend, but the smaller markets with great weather/less taxes have a clear advantage over the markets who basically built the NHL in the first place.

Not all markets should be or have been created equal. Everyone should be able to utilize their advantages.

 

[Legion34]

I think the easiest thing would be to have all teams have an office in a no tax state like Florida and let them sign a percentage of their salary as a signing bonus to make it even. Would that work?

That way they make their money in a no tax state and it evens up take home.

 

[Sypher04]

Although this would never happen, and taxes are a state, provincial, and or federal issue, it is frustrating.

The league went out of it's way to create parity, and I get why, but they totally neutered the advantages teams like NYR, MTL, and TML had when it came to being able to use it's financial might, and while we paid to help smaller southern markets on top of it.

Not saying we had proper management in place for years in Toronto when we could spend, but the smaller markets with great weather/less taxes have a clear advantage over the markets who basically built the NHL in the first place.

Not all markets should be or have been created equal. Everyone should be able to utilize their advantages.

I think anything you can do to sell the city to a prospective player is fair game, but the system itself should not basically have differing values of the cap in different locations. I concede it's a complex issue though, and I don't pretend to be the one with the answer on the best way to fix it.

 

[kilowatt]

Player contracts should be based on a percentage of the cap at the time of signing, and the real cap dollars of teams should be normalized based on taxes.

 

[DanM]

I think anything you can do to sell the city to a prospective player is fair game, but the system itself should not basically have differing values of the cap in different locations. I concede it's a complex issue though, and I don't pretend to be the one with the answer on the best way to fix it.

Agreed

The complexity of trying to fix this would be too much for any league to want to consider tweaking.

I think cities should help themselves by selling what they have to offer, and should be able to fully supplement salaries with endorsement deal after endorsement deal.

Times have also changed, and with the type of money being made today, players want to live in warm climates with less tax. They also seem to value more privacy and financial stability as opposed to playing for legendary franchises.

I remember watching old time videos of how proud the players were to play for historic teams, times and priorities are just too different for todays athletes.

If I am an NHL player, I would want to win in a place like Toronto or Montreal over everything, you would be a god forever.

 

[kilowatt]

If I am an NHL player, I would want to win in a place like Toronto or Montreal over everything, you would be a god forever.

If I'm an NHL player, I want to make the most amount of money to support my family in a safe neighborhood with great weather. Not everyone wants to be a celebrity.

 

[Legion34]

Player contracts should be based on a percentage of the cap at the time of signing, and the real cap dollars of teams should be normalized based on taxes.

But then everyone would have to spend to the cap?

 

[treple13]

As long as they account for cost of living, sales tax, desirability of location, nightlife, endorsement contracts, etc. as well