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

[DuklaNation]

Lol

Let's just say I pay enough that Tennessee looks good.

And Brian Bellows cited taxes as his reason for not wanting to play in Canada- in 1982. But he didn't then turn down Minnesota and insist on playing in whatever state had the lowest tax rate.

So taking an individual.case is meaningless because it still doesn't explain why if NIT is such a big factor that the NITS teams aren't overflowing with talent and mopping up their respective leagues.

So the question then needs to be asked, why is that the case? Perhaps then we can find the answer. Weather, current team succxess, coach's reputation, team culture reputation, city night life reputation.....all of the above

It's funny that people accept salary caps but deny the existence of tax implications.

 

[Golden_Jet]

Sorry, but that's not how it works. You can't pretend all players are signing under the same set of circumstances. The cap changes, which means the value of the dollars changes too. At the time Panarin signed, Ovechkin was on a contract that was lower in cap hit, but at the time he signed it the deal was higher relative to the cap than the one Panarin signed (16.82% vs 14.29%). And then you have to factor that Ovechkin contract was signed when the player was RFA and not UFA, which means they were playing in different markets.

Starting the same year as Panarin's deal, Matthews signed a contract that was only slightly less than Panarin... but again, he was an RFA and not a UFA. Once he moved into UFA territory, the deal he signed was a higher percentage of the cap than Panarin's.

Cap hit % isn't perfect, but it's far far FAR better than raw cap hit.



The league didn't shut-down the back-diving contracts by fiat. It was part of the CBA negotiation.

Escrow is a great example. The players wanted a cap on escrow. The league said "fine, we want slower cap growth." And we ended up with a cap on escrow and a new formula for calculating the cap.

Every single thing is a point of negotiation. It doesn't matter how many players benefit from it.

Cap on escrow was temporarily until Covid debt was paid back. Now with escalating cap growth, we’ll see what they do with escrow in next CBA.

If more than 1/2 the league is way over the midpoint, than likely becomes a factor again.

 

[PistolPete]

It's funny that people accept salary caps but deny the existence of tax implications.

I'm not denying tax exemptions outright. I'm questioning the argument they provide a substantial benefit to teams to the point that it can function as an explanation for the success the Panthers currently enjoy.

And by the way, where there is no state income tax, property tax, sales tax etc tend to be higher. The governments get their money one way or another. Players' agents I'm sure know this.

 

[SirKillalot]

Can you explain this, please?

Or maybe I should say could try.
I don't get why the leagues haven't tried this already.
Making an overall national tax plan with all 50 states, given how players are taxed for all away games anyhow.
Which would have to include Canada too then I suppose.

 

[Bank Shot]

Sorry, but that's not how it works. You can't pretend all players are signing under the same set of circumstances. The cap changes, which means the value of the dollars changes too. At the time Panarin signed, Ovechkin was on a contract that was lower in cap hit, but at the time he signed it the deal was higher relative to the cap than the one Panarin signed (16.82% vs 14.29%). And then you have to factor that Ovechkin contract was signed when the player was RFA and not UFA, which means they were playing in different markets.

I understand that. Still doesn't make it a team friendly deal.

Setting a new high mark for free agents is an NHLPA friendly deal.

I dont think you would get much agreement from anyone else that the largest ufa signing in history was team friendly no matter how much you believe it.

 

[joestevens29]

It definitely helps. Imagine the Oilers or another contender with an extra 10M cap space.

We'd just have more Arviddson and Skinner type contracts

 

[x Tame Impala]

Larger markets have higher tax rates in general. Giving them more cap space based on a % tax rate is just going to punish small market teams. Why even have a salary cap at that point?

 

[Sendhelplease]

The reality is that certain locations have advantages and disadvantages that are impossible to fully quantify or balance. If the tax advantage is addressed what about the fact that Toronto will have an easier time signing players who want to play for their hometown team. Should San Jose be given more cap space because so few players grow up as sharks fans? Should San Jose suffer a cap space penalty because they have nice weather?

 

[x Tame Impala]

The reality is that certain locations have advantages and disadvantages that are impossible to fully quantify or balance. If the tax advantage is addressed what about the fact that Toronto will have an easier time signing players who want to play for their hometown team. Should San Jose be given more cap space because so few players grow up as sharks fans? Should San Jose suffer a cap space penalty because they have nice weather?

No it doesn't count for your team, only for Toronto because their star players can't put their big boy gear on and win a playoff series against the Florida squads.

 

[PistolPete]

The reality is that certain locations have advantages and disadvantages that are impossible to fully quantify or balance. If the tax advantage is addressed what about the fact that Toronto will have an easier time signing players who want to play for their hometown team.

Tavares was an anomaly in that regard. 20 years of FA and the Leafs aren't exactly getting stacked with players from southern Ontario.

Canada just isn't a popular destination for players.

 

[Tawnos]

I understand that. Still doesn't make it a team friendly deal.

Setting a new high mark for free agents is an NHLPA friendly deal.

I dont think you would get much agreement from anyone else that the largest ufa signing in history was team friendly no matter how much you believe it.

It's not like there's much of a data sample, because the situation just doesn't happen often. If you look at the top-20 cap hits among forwards:

7 were RFA eligible.
1 was signed as a 35-year old (Ovechkin).
10 others were UFA eligible, but signed extensions.

None of those are really comparable to what happened with Panarin, a UFA in his prime changing teams. He and Tavares are the only two players in that top-20 who fit. A team friendly deal is one where the player could have asked for more or gone elsewhere. When you have two teams offering more money than the Rangers, then yes... it's a team friendly deal. Is it as friendly as many of those extensions were? No, I would never claim that. I just think it's beside the point.

PS. Chara was the largest UFA signing in history.

 

[Poppy Whoa Sonnet]

The solution is change the CBA and accounting/corporate structure to a system where every player gets paid by a single entity (The NHL) instead of individual teams. The salary pool is then generated by individual teams and their revenue. I believe this is how MLS does player salaries.

Edit: I am talking out of my ass and am not a labor lawyer but seems some thing creative could be done here.

 

[Cool Hand Puke]

Why did it take 14 years for the first no state tax team to win a cup after the introduction of the salary cap? Why did 3 cups come out of California since the introduction of the salary cap? 1 for Boston? 3 for Chicago? 1 for Detroit? 1 for St. Louis?

 

[joestevens29]

Why did it take 14 years for the first no state tax team to win a cup after the introduction of the salary cap? Why did 3 cups come out of California since the introduction of the salary cap? 1 for Boston? 3 for Chicago? 1 for Detroit? 1 for St. Louis?

I guess at the end of the day regardless if no state tax team's were in the final four there would be some sort of thread on these boards complaining about some unfair advantage that the final four teams hold over others.

 

[MasterofGrond]

The solution is change the CBA and accounting/corporate structure to a system where every player gets paid by a single entity (The NHL) instead of individual teams. The salary pool is then generated by individual teams and their revenue. I believe this is how MLS does player salaries.

Edit: I am talking out of my ass and am not a labor lawyer but seems some thing creative could be done here.

Would not impact player taxation at all, because it doesn't matter who's paying you. What matters is where you're being paid (and for athletes that's literally on a nightly basis).

 

[Cool Hand Puke]

I guess at the end of the day regardless if no state tax team's were in the final four there would be some sort of thread on these boards complaining about some unfair advantage that the final four teams hold over others.

Damn Californians and their…. Sunshine…

Damn Chicago and their… snow causing the players to having nothing better to do than to train…

Damn Boston and their… cah-keys

 

[Cool Hand Puke]

Would not impact player taxation at all, because it doesn't matter who's paying you. What matters is where you're being paid (and for athletes that's literally on a nightly basis).

I wouldn’t except “tax professional” ideas to come out of this thread.

 

[nbwingsfan]

No it’s not. It’s not a cycle. The rules tangibly changed in 2013-2014 when the back diving contracts were outlawed. Almost immediately after no state tax teams had a massive advantage and all of them
At the exact same time started to get players to sign for less. That’s not a cycle.

How many of these teams are no state tax teams again?

 

[FerrisRox]

It’s becoming a big problem that the NHL has to be worried about. The NHL’s smallest TV markets are able to spend in some cases 15%+ more than large market teams.

Take Panthers vs Rangers for example.

Between NY state tax and NY city tax, the rangers roster for the same exact salary takes home about 15% less than floridas roster.

1) will the nhl allow a “tax allowance” to make everyone have the same net effective ceiling?

2) is it politically palatable for states and cities like ny/nyc to exempt athletes from state and city income tax? IMO it’d be deeply popular from constituents to do so.

I don't think this is a big problem at all.

The solution is to leave things as they are.

 

[PistolPete]

Why did it take 14 years for the first no state tax team to win a cup after the introduction of the salary cap? Why did 3 cups come out of California since the introduction of the salary cap? 1 for Boston? 3 for Chicago? 1 for Detroit? 1 for St. Louis?

1 for Toro....well, an apoearance at least in the EC....uhhh...nevermind.

 

[PistolPete]

PS. Chara was the largest UFA signing in history.

At 6'9", I ain't surprised

 

[PistolPete]

I don't think this is a big problem at all.

The solution is to leave things as they are.

Surely the experts on these boards saying it is a problem can't be mistaken. Never you mind the compete lack of evidence supporting their case either, cause that's just an inconvenience.

 

[Jeune Poulet]

Remove the salary cap. Remove ANY form of revenue sharing. If your team can't sustain it, then f***ing move it to another market! Remove ANY semblance of NMCs or NTCs. Players don't get to choose where you are traded. They can always go play in some other league if they don't like it. Bump the age to obtain unrestricted free agency to 30, or 31 years old. Put back harsher penalties on RFA hostile offers.

None of those changes are going to happen.

But if they did, it would fix a lot of what went wrong in the last three decades with the NHL.

 

[Legion34]

View attachment 1043172

How many of these teams are no state tax teams again?

That’s silly. Two of the 6 are expansion teams that weren’t in the league for years.


Now do cup finalists since 2016.

How many of them are no state tax teams.

 

[PistolPete]

Remove the salary cap. Remove ANY form of revenue sharing. If your team can't sustain it, then f***ing move it to another market! Remove ANY semblance of NMCs or NTCs. Players don't get to choose where you are traded. They can always go play in some other league if they don't like it. Bump the age to obtain unrestricted free agency to 30, or 31 years old. Put back harsher penalties on RFA hostile offers.

None of those changes are going to happen.

But if they did, it would fix a lot of what went wrong in the last three decades with the NHL.

Why move UFA status to 30?

Why not go all out? Every single player not under an NHL contract is a UFA- including age eligible prospects?

And make the term limit 3 seasons.