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

[thebeernerd]

complexity doesn’t change reality.

It's not reality, it's media manufactured consent. Name me five players who have explicitly signed with this as a reason.

If this was the reality as you say, the Panthers wouldn't have been a steaming pile of shit for the better part of this quarter century, and the Lightning would have always been a perennial powerhouse instead of one that had struggled with on-ice struggles and off-ice financial issues.

 

[Crede777]

Whether or not it's an actual advantage, players and their agents do perceive it as an advantage.

Here's a great article from the AP on this: NHL free agency shows teams in states with no income tax have an advantage

Here is my pitch for how to address this matter: Amend the CBA to state that player payments from the league account for income tax discrepancies. Players in provinces/states with higher income tax receive more money out of the escrow and players in states with less or no income tax receive less income out of escrow.

It isn't as simple as players sign a contract for x dollars over y years so they get x/y each year minus income taxes and other withholdings. Player payments are complicated. Money paid to players goes into escrow which is then paid out as a portion of the overall hockey related revenue. This means what a player earns doesn't necessarily match what the player signed for.

Here's an article on Panarin complaining about the complexities of escrow: Artemi Panarin to NHL owners: ‘It is time to fix the escrow’

What the league needs to do is further modify player payments by incorporating player specific income taxes into player payments out of escrow. Instead of getting a piece of the HRR pie based on their contracted salaries, the players get a piece of the HRR plus income tax based on their salaries and what team they play for.

Players in states/provinces with higher income tax will receive slightly larger pieces of the HRR pie while players in states with lower/no income tax get slightly lower.

The justifications for this approach are:
1. It is a method which can be adjusted as needed by the league and NHLPA.
2. It only adds a small level of complication to an already complicated system.
3. Teams in higher income tax areas tend to be teams which have traditionally contributed more to the overall HRR each year (Canadian teams, NY, Chicago, LA, etc.). Teams in lower income tax areas have traditionally contributed less, although that could be changing (see #1 above).
4. This method can be tailored to account for the fact that players pay income tax based on where they play each night. It can also be tailored to account for mid-season trades.

 

[thebeernerd]

Whether or not it's an actual advantage, players and their agents do perceive it as an advantage.

Here's a great article from the AP on this: NHL free agency shows teams in states with no income tax have an advantage

Correlation does not equal causation. At the very least, it's a bonus for teams that are already good for reasons beyond this silly talking point.

This isn't a talking point in the MLB, NBA, or NFL. Please think to yourself as to why that might be.

 

[Legion34]

It's not reality, it's media manufactured consent. Name me five players who have explicitly signed with this as a reason.

First. You are misunderstanding the issue.

It’s not that players will only sign in a place for taxes. It’s that players will sign X money. And they take less gross pay because their bottom line is the same.

Star Players will sign in LA/toronto/nyr etc.

They just take 14% aav instead of 11.

as far as your question. Off the top of my head.

Dadanov blocked a trade to California. Radilov Said he took the Dallas offer due to the taxes.

Alex tuch talked about his taxes when he signed in Vegas on spittin chiclets.

Guentzel eluded to taxes. He also mentioned other factors but GM Brisebois specifically cited tax advantages.

Poile openly talked about “Nashville dollars” and how he translated salaries into no state tax dollars when negotiating.

Lewis gross said he makes a spreadsheet of how much money his players would take home in each market.

 

[Crede777]

Correlation does not equal causation. At the very least, it's a bonus for teams that are already good for reasons beyond this silly talking point.

This isn't a talking point in the MLB, NBA, or NFL. Please think to yourself as to why that might be.

I agree that correlation does not equal causation. Re-read the part of my post that you quoted.

It may or may not actually lend a real advantage. That said, the players, agents, and GM's PERCEIVE it as an advantage. And it's that perception that is what is important. If players THINK there is an advantage, then they will act accordingly.

 

[cowboy82nd]

Abolish Palm Trees

Hey, I like Palm trees.

 

[Golden_Jet]

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.

What’s the percentage since the cap started.

 

[Laus723]

Something can be an advantage and not automatically make you win. Mcdavid is the best player in the league, he is an advantage to have on the team. They still have not won the cup.

It's not that hard to understand, I've said I don't think it's a massive problem, but I know it exists, I don't need to deny facts because I'm afraid it conflicts with my opinion of it not being a big issue.

So were you disagreeing with the fact that I said or arguing against a position you think I hold?

Yep, it’s an advantage. 100%. As is having McDavid, but team management needs to figure out a way to build around and with the advantage in order to make it work. Part of that is not handing $10 mil AAV deals to guys just coming off their rookie deals, it’s signing Tkachuk before he played a minute for 8 years at $10 per when he could’ve gotten more had he signed a shorter deal with how it’s gone here. Using assets to land guys struggling line Bennett and Reinhart, knowing to grab Mikkola and claim Forsling, then hiring the right coach and bringing in guys who’ll play his system. We got all kinds of shit for walking away from Brunette, Zito didn’t see it happening with him and moved on. He didn’t see it happening with a 100+ point player and was criticized for that trade. We were fleeced they said since we sent so much, that took stones to trade Huby. We have a $10 mil goalie that we were crushed for having, that’s suddenly never brought up. Wasn’t an advantage for the first half of it.

It takes great scouts, a great coach, players who buy in, owners willing to spend…it’s lazy, disingenuous, and dumb for so many to point to TAXES as the reason to our success.

 

[MoneyManny]

I love how with a hard salary cap the favored teams for players always end up being in cities that absolutely hate the sport of hockey.

Very counterintuitive and broken.

 

[Beerz]

Florida has a relatively low property tax too? They just are being subsidized by states with a higher tax burden.

Huh.? Florida generates the 4th most federal tax revenue

In 2023 they paid in 17 billion more than they received.

 

[leeroggy]

This whole issue is just whining at its worst

If a player will only sign in a non-state tax state, they are not the type I want to sign.

If the whiners can't handle it, start your own league and ban those states from having a franchise . . . but don't worry, you'll find another thing to whine about

 

[GIN ANTONIC]

If your team or GM isn't good enough to sell players on coming to their team while offering them millions of dollars then they suck at their jobs. Get creative and pitch other benefits of the team, area, opportunities to be marketed and have endorsements within the community and area. Like this is how sales work. There are tons of other things that you can put into a compensation package other than just the salary.

Some players care about team facilities and off ice support for them and their families. A certain amount of season tickets or private box opportunities. Charities or helping them with other passions they might have in life. Rarely at this level is straight up money the only deciding factor because they are going to be making a boatload of it anyway. If you're not offering anything else then sure you're gonna lose out to the highest bid but then that's on you.

 

[Salsero1]

I love how with a hard salary cap the favored teams for players always end up being in cities that absolutely hate the sport of hockey.

Very counterintuitive and broken.

Yup, we totally hate hockey here in Raleigh. That's why we are at 100% capacity and sold out our outdoor game faster than anyone else.

 

[Space umpire]

None of that is an opinion. You haven’t addressed the clear tax advantages and decided to talk about other things.

There is no clear tax advantage. Signing bonuses eliminate “nearly” all of it and potential for getting well paying commercial endorsements actually makes LA, NY, Tor, Mon, more financially beneficial.
You keep pretending the tax situation is a be all end all. Do you know what doesn’t change … the weather in Florida, California, Texas, Tennessee and Carolina vs the north.
You also ignore superior scouting. Home grown teams vs teams constantly over paying UFA’s or like the idiot Leafs adding an over payed UFA to destroy their entire salary structure.

 

[Super Hans]

Register to vote in U.S. elections | Vote.gov

https://www.elections.ca

 

[The Marquis]

I have the actual answer. Buy up all the available real estate in those cities (except Seattle, because this already applies there and wouldn't need to change) and their suburbs, keep them off the market artificially inflating the living hell out of real estate prices so the cost of living is at Seattle, Bay Area, Toronto, Boston and Vancouver levels.

 

[CrazyWayne]

I honestly don't see this as a problem, but if this does become a major topic. I think the easiest and most simple ways to go about this is to just eliminate the hard cap ceiling

 

[Hale The Villain]

If Canada wants to attract highly skilled people to work in their country they need to reduce the highest marginal tax rates and compete with the lower tax alternatives down south. It's common sense.

Everyone knows if players weren't paying over 50% marginal tax rates players would be more willing to play in Canada, and the same holds true for other high skill high salary occupations - doctors, lawyers, engineers, etc...

The NHL shouldn't be in the business of bailing out the Canadian government by subsidizing their uncompetitive tax policies.

 

[Lieutenant Bookman]

Yup, we totally hate hockey here in Raleigh. That's why we are at 100% capacity and sold out our outdoor game faster than anyone else.

Happiness is only allowed to be experienced by fans of legacy teams with large fanbases

 

[SmytheKing]

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?

Drew Doughty's second contract was for about 10% of the cap at the time. Just like Hedman's was when he signed his first "big" contract. There. It happens.

Doughty's most recent contract was signed when he had just come off a Norris win and a 2nd place finish and he was 29 years old. Hedman's most recent contract was signed after a 15th place finish and a 6th place finish and he's 35.

Ignore context all you want if that helps you feel good about your point. I don't feel like going back and forth with someone who just wants to prove that they're right by using bad data and isn't interested in anything other than that. Good luck out there.

 

[TheDoldrums]

This isn't a talking point in the MLB, NBA, or NFL. Please think to yourself as to why that might be.

Probably because none of those leagues have the same rigid salary cap...

MLB no cap, NBA soft cap, NFL deals are reworked all the time partway through

In the other leagues owners that want to spend more can do so pretty easily.

 

[Space umpire]

complexity doesn’t change reality.

If it was so complex and all these other factors had such an effect. you wouldn’t see such clear correlations

The other factors are also a clear

Florida has a relatively low property tax too? They just are being subsidized by states with a higher tax burden.

Please explain to me how Floridas elementary and high schools are subsidized by states with higher tax burdens

 

[Summer Rose]

The other factors are also a clear

Please explain to me how Floridas elementary and high schools are subsidized by states with higher tax burdens

As a gentle nudge, I would prefer that we not go this direction with the thread. It's off topic and could easily become political.

 

[Choralone]

"A foolish consistency is the hobgoblin of little minds..."

 

[Golden_Jet]

Florida has a relatively low property tax too? They just are being subsidized by states with a higher tax burden.

Actually that’s wrong, it’s quite high.