Proposal: Something has to Change - Net Salary Advantages to select NHL teams, and Disadvantages to others

[Laus723]

Lack of ability to take advantage of an advantage to your satisfaction does not minimize the advantage your team has

But we agree your team was not the best at using the advantages.

We have that in common

Don’t put words in my mouth, the only points you post that hold water are the ones that show why this isn’t the big deal you’ve tried all day to make it out to be.

Period. End of story.

Any one think it's a coincidence that the final 3 of the 4 teams were from tax free states???

Lmao, explain how the tax benefits helped Florida beat Toronto, while also explaining how they equally benefitted Toronto in beating Tampa.

What a pathetic excuse.

 

[kgboomer]

Any one think it's a coincidence that the final 3 of the 4 teams were from tax free states???

Yes.... Bruins were by far the better team. When the Panthers won against them, the Leafs were favorite to win the Stanley Cup and well, Leafs being the Leafs... choking dogs again. Panthers shouldn't have been there.

 

[Hockey Outsider]

Also. As an aside. The RCA thing is ridiculous. And RCA is a fancy RRSP. Which does NOT eliminate taxes. It gets taxed when you take it out and limits
Interest and growth opportunities and determines where you live and retire.

That's exactly the purpose of an RCA. When it comes to tax planning for wealthy taxpayers, generally speaking, you have three options (the "3 D's" of tax planning):

• Deduct - claim expenses to reduce the amount of taxable income
• Defer - shift the income into a future period
• Divide - shift the income to someone (ie family member) in a lower tax bracket

The RCA is a powerful tool for the 2nd D - deferral. Deferring income tax into the future is (generally speaking) a good idea. It's especially useful for professional athletes, since the majority of them will earn a very high income for a relatively short time frame. The benefits are 1) when the player's career is over, they'll likely be paying tax at a much lower rate (so you have a direct reduction in taxes payable) and 2) shifting the income to the future means the NPV of the payments will be substantially lower (ie better to have to pay $1M in 15 years rather than today).

I agree that, conceptually, there are similarities between an RCA and an RRSP. The biggest advantage is an RCA allows for substantially higher deductions. There's absolutely no comparison as to which is more beneficial for athletes (or executives or small business owners).

An RCA isn't the right solution for every athlete, and there are certain drawbacks that need to be considered. But, if structured properly, the advantages can be considerable. In fact, in the NBA, RCA's are banned because the league believes they give the Raptors an unfair advantage (but this advantage is available for all seven Canadian NHL franchises).

 

[Zerotonine]

Yes.... Bruins were by far the better team. When the Panthers won against them, the Leafs were favorite to win the Stanley Cup and well, Leafs being the Leafs... choking dogs again. Panthers shouldn't have been there.

On paper the panthers are better then how there season went tho....

 

[DistantThunderRep]

That's exactly the purpose of an RCA. When it comes to tax planning for wealthy taxpayers, generally speaking, you have three options (the "3 D's" of tax planning):

• Deduct - claim expenses to reduce the amount of taxable income
• Defer - shift the income into a future period
• Divide - shift the income to someone (ie family member) in a lower tax bracket

The RCA is a powerful tool for the 2nd D - deferral. Deferring income tax into the future is (generally speaking) a good idea. It's especially useful for professional athletes, since the majority of them will earn a very high income for a relatively short time frame. The benefits are 1) when the player's career is over, they'll likely be paying tax at a much lower rate (so you have a direct reduction in taxes payable) and 2) shifting the income to the future means the NPV of the payments will be substantially lower (ie better to have to pay $1M in 15 years rather than today).

I agree that, conceptually, there are similarities between an RCA and an RRSP. The biggest advantage is an RCA allows for substantially higher deductions. There's absolutely no comparison as to which is more beneficial for athletes (or executives or small business owners).

An RCA isn't the right solution for every athlete, and there are certain drawbacks that need to be considered. But, if structured properly, the advantages can be considerable. In fact, in the NBA, RCA's are banned because the league believes they give the Raptors an unfair advantage (but this advantage is available for all seven Canadian NHL franchises).

You don't know anything. Legion34 is be all and end of all of taxes.

 

[Legion34]

That's exactly the purpose of an RCA. When it comes to tax planning for wealthy taxpayers, generally speaking, you have three options (the "3 D's" of tax planning):

• Deduct - claim expenses to reduce the amount of taxable income
• Defer - shift the income into a future period
• Divide - shift the income to someone (ie family member) in a lower tax bracket

The RCA is a powerful tool for the 2nd D - deferral. Deferring income tax into the future is (generally speaking) a good idea. It's especially useful for professional athletes, since the majority of them will earn a very high income for a relatively short time frame. The benefits are 1) when the player's career is over, they'll likely be paying tax at a much lower rate (so you have a direct reduction in taxes payable) and 2) shifting the income to the future means the NPV of the payments will be substantially lower (ie better to have to pay $1M in 15 years rather than today).

I agree that, conceptually, there are similarities between an RCA and an RRSP. The biggest advantage is an RCA allows for substantially higher deductions. There's absolutely no comparison as to which is more beneficial for athletes (or executives or small business owners).

An RCA isn't the right solution for every athlete, and there are certain drawbacks that need to be considered. But, if structured properly, the advantages can be considerable. In fact, in the NBA, RCA's are banned because the league believes they give the Raptors an unfair advantage (but this advantage is available for all seven Canadian NHL franchises).

Again as has been discussed the NBA is entirely different as Canadian teams spend 70% of their games here

Also… you are locking up your actual current earnings.
You have to retire certain places
And the idea that an Auston Matthews is going to go under the marginal tax rates like a grandpa who worked at the post office is silly

Regardless. There are lots of players/agents who disagree and there is NO evidence that players take
Less like no state tax markets

But IF it turned out the canadian teams were having advantages. I would support them being eliminated

Because am not a child

You don't know anything. Legion34 is be all and end of all of taxes.

Nope. Not at all. I just listen to countless agents GMs accountants and players who have said what I said.

You thought some tax expert was the be all end all last
Time, only to have him admit I was right

 

[garmonbozia]

My team gets tax advantages and there is nothing you can do about it! Haha.

Keep trying to sway the hearts and minds here on Hfboards though. I'm positively, definitely, 100% sure it will lead to the NHL and NHLPA making the necessary changes to level that playing surface.

Until then, let's go Lightning!

 

[BLNY]

It's been beat around the bush here a few times.

It really came to a head for me when people were comparing the Subban contract and Eklbad contract. When you figured out next income, it was far closer. From that moment, I was fully in the camp of a shift to a net income salary cap.

So, why hasn't it happened?

Owners - 25-7. Even in states where there is state income tax, they still have an advantage. As a result, I don't see a scenario where owners will vote to give away that advantage.

Players - the union won't like it because UFAs won't be able to use Canadian markets to drive up their price. It's a way players can artificially drive market value. Shanahan and Hull both did it with Montreal.

Unfortunately, I think this is the system we've got. We're stuck with it. It'll be on Canadian teams to be smart asset managers: draft well, sign max term deals right out of ELC to keep them as long as they can for as cheap as they can, sell high.

 

[TaketheCannoli]

Or more simply just have the salary cap apply to post tax income not pre tax income. That's a level playing field.

As long as after tax income for off ice earnings like endorsements are counted against the salary cap. As an example, if a guy earns $1 million in endorsements after taxes, it counts as $1 million against the cap.

 

[Barnaby]

Just about all the wives prefers warmer climate than Winnipeg or anywhere in Canada. And just want to be part of it, New York, New Yorkkkkk. Must be helping a lot when it's time to sign a contract.

Some people also value being near family. If player x is drafted by team y and meets girl x, then he might prefer to stay where he is. Maybe draft better… seems like the Habs are on the right track. Suzuki signed, Caufield signed, Dubois might even force himself to MTL. Will the complaining stop then? “We signed Hoffman and he sucks. If we could’ve paid more then we could’ve stolen a better play from Florida. It’s not fair.”

 

[skilles]

Oh hell no, I'd say choose different politics is want to fix that problem.

 

[Garbageyuk]

This gives advantages to the very same markets in the US where Bettman is trying to “grow the game”. Nothing will change until Canadian fans stop blindly supporting the NHL despite them not giving a f*** about us. As soon as it affects the league’s bottom line, watch how fast shit like this would get corrected. The Canadian markets subsidize the entire rest of the NHL.

 

[Garbageyuk]

As long as after tax income for off ice earnings like endorsements are counted against the salary cap. As an example, if a guy earns $1 million in endorsements after taxes, it counts as $1 million against the cap.

That’s a terrible idea.

 

[RussianBum86]

Why punish players that choose to sign with teams that dont force you to pay taxes without representation ? No Taxation without representation. The migration of citizens has left many of the high taxes and high property values to choose financial freedom from nonsense taxes and better property values while enjoying more freedoms.

 

[DistantThunderRep]

This thread makes you hate hockey fans.

 

[Garbageyuk]

As long as after tax income for off ice earnings like endorsements are counted against the salary cap. As an example, if a guy earns $1 million in endorsements after taxes, it counts as $1 million against the cap.

Coming back to this because it’s such an absurd suggestion lmao. Like how would this even work?

“Oh no, Crosby decided to sign a $100M deal with Reebok. The Pens are now $100M over the cap, time to fold the team. I hope it was worth it Crosby, you greedy bastard”.

 

[TBF1972]

After reading in this thread there needs to be action taken to level the playing field. Players who raise a family wouldn't go into certain markets because of the education system.

Raising the taxes to fund a better school system in those places could be a solution.

 

[heilongjetsfan]

Should there be a weather tax also?
Maybe for every foot of snow that falls should be a extra million in cap space.

As a Jets fan, I want it based on windchill. That is all. Thank you.

 

[TBF1972]

Coming back to this because it’s such an absurd suggestion lmao. Like how would this even work?

“Oh no, Crosby decided to sign a $100M deal with Reebok. The Pens are now $100M over the cap, time to fold the team. I hope it was worth it Crosby, you greedy bastard”.

yes it is absurd. but you can't ask for levelling the playing field in regards to taxes and then wanting to take advantage of the off-ice earning potential in certain markets. the biggest stars can easily take less nhl salary, if they make more money off the ice. it's up to the gm to convice the player and his agent from the advantage of the market.

paying stars is not the issue. overpaying on middling replaceable players normally gets teams into cap hell.

 

[ricky0034]

we should just move all 32 teams to Miami

evens out taxes with no state taxes for anyone, evens out travel, evens out city desirability, evens out arena conditions etc

it's the ultimate proposal for fairness

 

[Legion34]

yes it is absurd. but you can't ask for levelling the playing field in regards to taxes and then wanting to take advantage of the off-ice earning potential in certain markets. the biggest stars can easily take less nhl salary, if they make more money off the ice. it's up to the gm to convice the player and his agent from the advantage of the market.

paying stars is not the issue. overpaying on middling replaceable players normally gets teams into cap hell.

Yes you can. Because you specifically decided to regulate the salaries and artificially created parity through a cap.

How people don’t understand this is mind boggling

The NHL is free to choose what they cap. They chose to cap the salaries. Not endorsements. Not weather. Not media. Not fans not investments.

Salaries. They created an artificial system.

The NHL to my knowledge does not limit scouts. That is not an unfair advantage.

But If they restricted the amount of scouts, but let some teams have more. Would you agree with that?

 

[tucker3434]

Yes you can. Because you specifically decided to regulate the salaries and artificially created parity through a cap.

How people don’t understand this is mind boggling

The NHL is free to choose what they cap. They chose to cap the salaries. Not endorsements. Not weather. Not media. Not fans not investments.

Salaries. They created an artificial system.

The NHL to my knowledge does not limit scouts. That is not an unfair advantage.

But If they restricted the amount of scouts, but let some teams have more. Would you agree with that?

We don’t even calculate contracts using the Canadian dollar. But we’re going to throw their tax code in the mix?

The cap is about cost certainty, parity is just a byproduct. They aren’t looking to spend more money on cost certainty. That would be nonsense.

 

[Bob and 200 others]

they do have to make it fair

It is fair, just because some whinny (and HOLY SHIT are you whinny) fan on the internet says otherwise doesn't make it so.

????

Are you kidding? Stamkos took 11% twice. He is easily a 14% cap hit. Kane and toews took 14.

Kucherov took 9.5. He is a 14% player.

Look at tampas cap sheet AAV. You will see tons of 11-12% AAV.

That adds up. I am saying it is an advantage. I am not saying it’s the ONLY advantage. I am not saying it is a bigger advantage than it is. I am NOT saying other teams don’t have other advantages. I am saying that the NHL chose to artificially implement an equal cap despite unrwual earnings/revenue/contributions.
Therefore. They created an unfair advantage.

Seravalli reported that Tampa actually spent the most in the league on outside salaries. Good for them. They are allowed.

I think instead of calling people liars, you may want to actually read the statements of the agents/GMs/players/media accountants who talk about it.

Also. As an aside. The RCA thing is ridiculous. And RCA is a fancy RRSP. Which does NOT eliminate taxes. It gets taxed when you take it out and limits
Interest and growth opportunities and determines where you live and retire.

The US has pension plans too. Plus it also can be challenged… see Bautista.

You can feel free to be as wrong as you like. But actually provide something useful.

Those players signed discounts for many reasons (weather, city, great team, great owner ect.), just because because your team doesn't have those advantages doesn't mean the NHL should or will try to even "even" things out.

 

[kcunac]

Of course there will be differences between cities. Taxes being a major one, but if we start compensating for that, where does it end? Will northern US team like Minnesota get compensated for the weather or US in general for no free healthcare? There are so many reasons why a city may be chosen over another. Taxes may be the most obvious but it isn’t the only one. Not even sure it’s the biggest one with the many tax sheltered vehicles and options available. Personally, school/mass shootings and racism are reasons I would not raise my kid in many places in the US, including some of the low tax cities.

As an aside, and so it doesn’t seem like I’m picking only on the US, I’m from Vancouver and had an opportunity at the end of my current position to return. I choose Ottawa. While Vancouver is beautiful, the drugs and to a lesser extent crime are out of hand and I’d rather we all freeze out butts then expose my kids to that. Ottawa has everything going for it for a family environment, just a terrible winter.

 

[Legion34]

We don’t even calculate contracts using the Canadian dollar. But we’re going to throw their tax code in the mix?

The cap is about cost certainty, parity is just a byproduct. They aren’t looking to spend more money on cost certainty. That would be nonsense.

No it isn’t? Parity was specifically put into the cap.

The players get 50% of HRR. There is NOTHING in
Cost certainty that says every team gets the same cap, any more than every player gets the same salary.

It isn’t hard