What is the solution to balancing the salary cap with no tax states?

[HockeyVirus]

No, but accountants can find loopholes you may never think of yourself, suggest for how to structure a contract (mainly, whether you take, say, $10m AAV in the form or $9m signing bonus and $1m salary, the other way around, or something else like that), etc. to minimize the player's tax burden. When they're making as much as they are, the amount of money they save on their tax burden is often more than they pay the accountant to find these loopholes and contract structure suggestion, thus making it worth it to pay them.

Sure but end of the day, if the law is you pay X you are paying it. Or they end up in a Tavares situation in a legal battle with the CRA

No, but they know how to use them, Matthews has one of the highest take home pays in the league for example.

That is because he get signing bonuses and lives in Arizona when it is paid. Not something applicable to 99.9% of players.

 

[Ghost of Murph]

Medical insurance and associated costs?

There's a lot that can get lumped into my "etc" category. I'm getting a little steamed thinking about all the ways we get taxed for having a low state income tax haha.

 

[Summer Rose]

Sure but end of the day, if the law is you pay X you are paying it. Or they end up in a Tavares situation in a legal battle with the CRA



That is because he get signing bonuses and lives in Arizona when it is paid. Not something applicable to 99.9% of players.

Perhaps you underestimate how complex and full of loopholes American tax code is, but I don't mean that as a personal jab or anything, and is probably not something we should be talking about in detail on here anyway beyond that the loopholes exist and players pay accountants who are good at using them.

 

[Golden_Jet]

Perhaps you underestimate how complex and full of loopholes American tax code is, but I don't mean that as a personal jab or anything, and is probably not something we should be talking about in detail on here anyway beyond that the loopholes exist and players pay accountants who are good at using them.

Well said

 

[the_fan]

2 of those organizations were considered league armpits in recent memory with calls for them to be relocated. They went out and built winning organizations. With no cap the Leafs or Rangers buy every top player and win forever (which is what the Rainjuhz fanboy in the NYP whose whining in today's edition likely inspired this thread wants).

There is a solution to that too. Make it so there is no team salary cap but there is a cap on player salaries

 

[Mosby]

Where was that argument when Florida sucked?

Where was that argument where teams in high tax states like Illinois, Massachusetts, and California were winning Stanley Cups?

Where is that argument now when teams like Seattle and Nashville, which play in states without tax, suck?

Where is the argument when rich teams like Toronto can offer insane frontloaded signing bonus money that small markets can't?

Or what about all the of the endorsement money that comes with playing in a huge market?

What about playing in Canada and getting paid in U.S. dollars?

 

[Calderon]

Denote one team as baseline in terms of its tax burden and assign a coefficient on every other franchise, respectively, to even things out. Update on every offseason if need be.

 

[Dr Robot]

Where was that argument when Florida sucked?

Where was that argument where teams in high tax states like Illinois, Massachusetts, and California were winning Stanley Cups?

Where is that argument now when teams like Seattle and Nashville, which play in states without tax, suck?

Where is the argument when rich teams like Toronto can offer insane frontloaded signing bonus money that small markets can't?

Or what about all the of the endorsement money that comes with playing in a huge market?

What about playing in Canada and getting paid in U.S. dollars?

Front loading a contract with Day 1 or January 1 bonuses and letting it collect interest for a year would offset any minor tax differance. That’s actually probably something that needs to be looked at more than the tax non-issue.

 

[I am Canadian]

Get rid of the hard cap. Put a luxury tax.

 

[Golden_Jet]

Get rid of the hard cap. Put a luxury tax.

They could but it would need to be revenue neutral, to offset the 50/50 split.

I guess if a team goes 10 million over the current cap, via luxury, then the tax that team puts in would be an extra 10 million into a fund to keep a 50/50 split.

That really only helps rich teams, so maybe they put in more, so poorer teams not using luxury, get a little , so that maybe they can, on certain years.

 

[Les LatterDaySkates]

Look at this man, out here disrespecting Buffalo hoes.

I said perceived.

 

[LaffyTaffy13]

Sure, you started off your thread that was wrong from the start. Insinuating players pay taxes for all 82 games in the their home state or province, with your 14 or 15% rate more.

You’ve skipped over residency, and many other factors.
So no, your not well versed on taxes, when you can’t get even get some of the easier parts of taxes correct.

Very very well versed. Again, tkachuk, verhage, reinhaft and barkov (their 4 highest paid players) get around 90% of their total annual pay in signing bonus. Being that it is in signing bonus in their home state of florida there is no state or city tax applied.

If they were in NY theyd be giving up about 14-15% if that immediately. This ones not complicated.

Florida effectively can sign near $14mm more in players than the rangers by making the majority of salary come in the form on signing bonus which they seem to be doing more and more of.

Floridas 4 highest paid players have salaries of $1mm in barkov, tkachuk, verhage and reinhart. The rest of their annual pay is paid in bonus and therefore not subject to state or city taxes.

Would the rangers be better if they could sign $14mm more of players?

You should do a little more research here

 

[Bank Shot]

Besides, where do we stop with the equalization credits?

You start and stop at things that are directly and concretely measurable like income after tax.

If no tax isn't an advantage like people are arguing in this thread, then why would anyone care if the NHL calculates cap hits on after tax income?

 

[Cool Hand Puke]

Gosh has it already been a week since the previous one of these? My how time flies…

 

[Cool Hand Puke]

You start and stop at things that are directly and concretely measurable like income after tax.

If no tax isn't an advantage like people are arguing in this thread, then why would anyone care if the NHL calculates cap hits on after tax income?

So teams with players that have kids get multiple tax breaks. Should we give every US teams higher cap for that for every teammate who’s got kids?

 

[Bank Shot]

So teams with players that have kids get multiple tax breaks. Should we give every US teams higher cap for that for every teammate who’s got kids?

I would probably just apply a standard after tax income percentage for each team based on a single employed man.

I don't think it would make a lot of sense to get into personal details such as marital status, health tax credits, or educational tax credits.

Like if a player declared bankruptcy due to parental interference and didn't pay any taxes that year they shouldn't have a higher cap hit. Would just go with a standard calculation. It's much easier to work with while still evening the playing field a bit. Most GMs aren't accountants after all. They struggle enough with the cap now.

 

[Sky04]

I would probably just apply a standard after tax income percentage for each team based on a single employed man.

I don't think it would make a lot of sense to get into personal details such as marital status, health tax credits, or educational tax credits.

Like if a player declared bankruptcy due to parental interference and didn't pay any taxes that year they shouldn't have a higher cap hit. Would just go with a standard calculation. It's much easier to work with while still evening the playing field a bit. Most GMs aren't accountants after all. They struggle enough with the cap now.

This is so dumb I can't believe someone actually thought of this, tell me you don't know the first thing about accounting or taxes without telling me.

 

[Lazlo Hollyfeld]

The oilers weren’t paying any state taxes last night. The Dallas stars will be filling a Canadian tax return because of their game tomorrow. This is a fan made problem to try and excuse their bad teams. Every time someone with an accounting degree explains that it’s not the issue you think it is, people cover their ears and start yelling “it’s still a problem”.

This. A thousand times this.

 

[dekelikekocur]

You start and stop at things that are directly and concretely measurable like income after tax.

If no tax isn't an advantage like people are arguing in this thread, then why would anyone care if the NHL calculates cap hits on after tax income?

First, the NHL can't really calc after tax, every player has different tax scenarios which all impact their tax liability. Second, there's more than just income tax and how it affects players. How their contracts are structured is a big part, NYR could literally signing bonus all of their players, have their players live in Arizona, Texas, Florida or many other locations for half the year and have less tax obligation than the Stars paying their players on normally designed contracts without signing bonuses. Then what happens when those signing bonus contracts are traded half way through the season or any other numerous situations arise? LTIR? so on and so on.

 

[JianYang]

You start and stop at things that are directly and concretely measurable like income after tax.

If no tax isn't an advantage like people are arguing in this thread, then why would anyone care if the NHL calculates cap hits on after tax income?

Is this suggesting that the nhl ought to demand each player's tax return to determine their after tax income?

A system like this can only be done on a player by player basis rather than on a team level. As an example, Auston matthews tax rate is going to be significantly different than mitch marner even though they are in the same bracket due to treaty and residency differences as well as the way each contract is structured. It's opening Pandora's box the deeper you go.

 

[JianYang]

So teams with players that have kids get multiple tax breaks. Should we give every US teams higher cap for that for every teammate who’s got kids?

Yes. The credit to the cap ought be recorded on each sleep hour lost due to a crying infant.

Each player should keep a log book and have a witness living with them who can corroborate the data.... the document should be notarized prior to submitting it to the league.

 

[hangman005]

I think teams should lose $500,000 in cap space every time their fans complain about no tax states.

 

[Bank Shot]

Is this suggesting that the nhl ought to demand each player's tax return to determine their after tax income?

Not at all. You use a generic template. There are websites that already calculate after tax income that allow you to compare between teams.

 

[Stephen]

I put this idea out there in 2005 about trading cap space and I think this still holds some merit as a mechanism for softening up the cap to introduce more flexibility.

Any team that doesn't spend to the cap should be able to sell or trade its unused cap space as a form of currency and revenue sharing mechanism. Maybe it's a dollar for dollar buy or maybe it's picks and prospects.

It basically keeps the HRR within the approved parameters and any team that feels hard done by some other economic factor can spend a little bit more. Maybe you cap the luxury spending, maybe you don't.

 

[Stephen]

Not at all. You use a generic template. There are websites that already calculate after tax income that allow you to compare between teams.

AI spits out a fairly interesting breakdown. I'm not going to post my results to get picked apart on a topic I know nothing about, but it's interesting to look at.