NBA has a cap. Grizzlies, Heat, Mavericks, Rockets, Magic aren't perennial finals participants.
The people who believe no state tax is a factor are grossly oversimplifying the explanation for Florida's success.
What is the solution to balancing the salary cap with no tax states?
- Thread starter LaffyTaffy13
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The people who believe no state tax is a factor are grossly oversimplifying the explanation for Florida's success.
Breakers
Make Mirrored Visors Legal Again
You’re still taxed at 41 different locals based on your salary
That is a fact.
That is a fact.
And something I only learned this past week.
And some would consider posting on an internet chat forum a waste if time! Pfft!
JadedRandom
Registered User
Just wanted to mention that there is definitely a salary cap advantage for the teams that are in states that have low income taxes.
But larger markets also have another key advantage irrespective of country; higher sponsorship deals and visibility, which also potentially means higher revenue for star players.
It comes with added drawbacks too, like not being able to go to the department store in peace and getting googly-eyed fans looking at you potentially all the time, but that's irrelevant to the subject matter.
Aside from that whole can of worms there is also the RCA, an option that players who play in Canada can use if they want to maximize their earnings. Jarome Iginla did, and it allowed him to take home many more millions over his career in Calgary than if he hadn't done it.
Small explanation of RCA (doesn't go into the details at all but good enough):
Planning for the Future: The RCA and Professional Hockey Players - GBL
The RCA situation is not as straight-forward as no state-tax vs. state tax, but it does give some ways for players in canadian franchises (or high-tax markets) to offset some of the higher taxes on their salaries.
The advantage of a lower tax-bracket that the RCA offers is unfortunately counter-balanced by the fact that the RCA, by its nature as a deferred commodity, generally gets out-performed over time because of inflation by money that could be more freely used by a player to invest if it wasn't tied-up with RCA.
Then we start going into tangents about which states exactly have which taxation brackets, how their respective legislature treats signing bonuses and how they are defined, the payment method of the NHL with its "pay per location and days spent there" structure, more besides, and this starts looking like a "Business of Hockey" mega post that would take hours upon hours to write and much brain power to comprehensively read.
Without getting caught-up in all of that, the short of it in this case is that the no state-tax teams DO indeed have sort of an edge on cap matters, moreso for star players and their contract structures.
Except that this shouldn't ****ing matter.
Even if you don't get 100/100 advantages going your way, a lot of the last winning teams of the last couple of years have managed to make it work even with state taxes.
Yes the game is not perfectly balanced, yes there are loopholes and teams sorta/maybe exploiting them. But with enough luck, good pro and amateur scouting decisions, good team building/identity, and strong coaching, any team can win.
The NHL could always re-balance things a bit, but it is still generally in a "very good spot" comparatively-speaking. We're talking details here compared to other sports.
This is not the MLB, where the game is rigged from the get-go and only the biggest teams have a good chance to win while some others are basically the farm teams of the big franchises and constantly losing their best players once they reach full free-agent status.
But larger markets also have another key advantage irrespective of country; higher sponsorship deals and visibility, which also potentially means higher revenue for star players.
It comes with added drawbacks too, like not being able to go to the department store in peace and getting googly-eyed fans looking at you potentially all the time, but that's irrelevant to the subject matter.
Aside from that whole can of worms there is also the RCA, an option that players who play in Canada can use if they want to maximize their earnings. Jarome Iginla did, and it allowed him to take home many more millions over his career in Calgary than if he hadn't done it.
Small explanation of RCA (doesn't go into the details at all but good enough):
Planning for the Future: The RCA and Professional Hockey Players - GBL
The RCA situation is not as straight-forward as no state-tax vs. state tax, but it does give some ways for players in canadian franchises (or high-tax markets) to offset some of the higher taxes on their salaries.
The advantage of a lower tax-bracket that the RCA offers is unfortunately counter-balanced by the fact that the RCA, by its nature as a deferred commodity, generally gets out-performed over time because of inflation by money that could be more freely used by a player to invest if it wasn't tied-up with RCA.
Then we start going into tangents about which states exactly have which taxation brackets, how their respective legislature treats signing bonuses and how they are defined, the payment method of the NHL with its "pay per location and days spent there" structure, more besides, and this starts looking like a "Business of Hockey" mega post that would take hours upon hours to write and much brain power to comprehensively read.
Without getting caught-up in all of that, the short of it in this case is that the no state-tax teams DO indeed have sort of an edge on cap matters, moreso for star players and their contract structures.
Except that this shouldn't ****ing matter.
Even if you don't get 100/100 advantages going your way, a lot of the last winning teams of the last couple of years have managed to make it work even with state taxes.
Yes the game is not perfectly balanced, yes there are loopholes and teams sorta/maybe exploiting them. But with enough luck, good pro and amateur scouting decisions, good team building/identity, and strong coaching, any team can win.
The NHL could always re-balance things a bit, but it is still generally in a "very good spot" comparatively-speaking. We're talking details here compared to other sports.
This is not the MLB, where the game is rigged from the get-go and only the biggest teams have a good chance to win while some others are basically the farm teams of the big franchises and constantly losing their best players once they reach full free-agent status.
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Gil Gunderson
Registered User
What about teams in big market (like Toronto and New York) that can pay bigger up-front signing bonuses? Do we need to find a way to balance that out?
Are we including revenue players make doing TV, radio, internet commercials.
A few years back it was noted that Maple Leaf players got a free luxury SUV for doing TV ads. Toews and Kane got 1 year leases then had to turn the vehicles in. That’s roughly 75% less value. I wonder what the commercial pays in Carolina or Utah?
I may not be American, but I'm pretty sure Congress doesn't make any decision on state taxation.
State congressman?
RevengeOfTheDrai
Registered User
State legislature. Significant changes to tax laws or new tax proposals usually require voter approval through ballot initiatives or referendums however.
Cool Hand Puke
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- Aug 11, 2008
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When you start with “let’s say” and pull numbers out of our ass, I immediately know the rest is gibberish.
Cool Hand Puke
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Let’s not forget the Dallas Cowboys, Miami dolphins and Vegas Raiders of the nfl
TrufleShufle
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- Aug 31, 2012
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Contracts with a massive bonus as a major part of the contract gets taxed where the player lives.
That is a fact.
Lieutenant Bookman
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- Aug 5, 2015
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The cap is intended to adjust for financial disparities between teams themselves, not adjust for macroeconomic differences between regions or cities. The league has never tried to make that an objective. Even taking taxes out of the equation, some places cost more to exist in than others. A player getting paid X in Boston or NY or Toronto or LA isn’t the same as a different player making the same X salary in Phoenix or Dallas or St Louis.
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If mann was trying to maximize his earnings and get every last possible penny he could, he would have to hire a slew of accountants who know the ins and outs of every state's and province's tax.laws, coat of living, property tax, sales tax etc etc
Sounds exhausting...and expensive
TrufleShufle
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This is Mackinnon, I googled, "NHL contract signing bonus," he's the first one who came up that was laid out like this and easy to copy paste. If you want to go through the tax free states you can, but if you just want numbers of what's possible here you go.
2023-24: $15.725M signing bonus, $775K base salary
2024-25: $15.725M signing bonus, $775K base salary
2025-26: $15.25M signing bonus, $800K base salary
2026-27: $3M signing bonus, $9.15M base salary
2027-28: $8.91M signing bonus, $990K base salary
2028-29: $8.91M signing bonus, $990K base salary
2029-30: $8.91M signing bonus, $990K base salary
2030-31: $8.91M signing bonus, $990K base salary
In total, $85.34 million of his contract will be paid in signing bonuses.
You keep posting these names as if they're all signing contracts in the same year after having the same relative seasons. Keep doing it though because eventually everyone will stop responding to your apples and oranges and then you can declare your victory.
Fatass
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- Apr 17, 2017
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Isn’t Arizona a no tax state? Maybe teams being good has more to do with competent management, and quality ownership than tax stuff?
Yes. Because despite the year. The weather. The coach. The GMs. The ownership. The country of origin. All of the possible factors.
They all sign within 1% of he each other in low and high tax markets.
you tell me. If there are so many dofferences. Why are all the contracts in no state tax markets similar. And why are high state tax markets similar?
Why do people sign for the same AAV in cup champion LA and non playoff Toronto.
Wouldn’t LA/SJ players sign for more similar to florida/tampa?
When Toronto was ran by Ballard. The leafs sucked? So I guess the Cap isn’t necessary right? Big market teams didn’t have an advantage until 2004?
Arizona has state income tax, but it's pretty low compared to other states. Tops out at 5.1%. I also think the income level required to have to pay any is on the higher end, but I don't know the exact numbers. I never made enough money to pay state income tax when I lived in Arizona myself, but I would imagine that NHL players all make enough to have to pay some.
Fatass
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False equivalence. Lots of factors go into why teams are good and others are bad. The Oilers win the Cup this year and then the narrative changes to something else, likely about the draft.
What do any of Those things have to do with the clear and indisputable advantage that no state tax teams have?
This doesn’t mean that it’s the only reason for any success. You are just taking about random things that have nothing to do with this issue.
Basketball is a different sport and can’t be used as a direct one to one comparison for a multitude of factors (team composition and size, star vs role player impact, luxury tax, etc). The advantage could be bigger in one sport when compared to another. Even then your list still has multiple finals appearances over the last few years.
Look at the NHL recent cup finalists,
Florida-EDM or Dallas
Florida-EDM
Florida-Vegas
Tampa-Avs
Tampa-MTL
Tampa-Dallas
BOS-STL
WSH-Vegas
Pitt-NSH
Bolded are tax free teams, there’s only 6 of them and one of them is Seattle and is new. I don’t get how anyone can say that it is not a massive factor for these teams.
Tax free teams are 19% of the league but have been to 53% of the last 9 finals, and every single one of them made at least one finals except for Seattle who haven’t been around.
Fatass
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Your opinion doesn’t make something clear and indisputable.
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