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qwijibo

(Proposal) Salary Cap Adjustments.

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The differing marginal taxes from state to state to province creates an unfair advantage to teams with no/low state taxes. It essentially allows them to sign players for less and exceed the cap in comparison to other teams.  In the next CBA the league should look at levelling the playing field.  

 

Players for Teams in Florida, Texas and Nevada have a marginal tax rate of 31.61%.  Compare that to the league worst taxes in Quebec that rings in at 49.49%.  That means those teams are able to exceed the cap by an equivalent of 17.88% compared to Montreal. And 12.5% more than the Canucks.  

 

The League should either use the Florida teams as a benchmark and allow teams with a higher marginal tax rate to exceed the cap by the same percentage as the difference.  Or use Montreal as the benchmark and lower everyone else cap ceiling by the difference.  The league says they want parity. It won’t remotely exist until every team has the same working budget for players.  

 

Compare Taxes to all NHL Teams

Based on the Annual Salary entered above

Anaheim Ducks

TAX RATE41.58%

 

 

Arizona Coyotes

TAX RATE35.98%

 

 

Boston Bruins

TAX RATE36.66%

 

 

Buffalo Sabres

TAX RATE38.29%

 

 

Calgary Flames

TAX RATE42.78%

 

 

Carolina Hurricanes

TAX RATE36.96%

 

 

Chicago Blackhawks

TAX RATE36.56%

 

 

Colorado Avalanche

TAX RATE36.24%

 

 

Columbus Blue Jackets

TAX RATE38.71%

 

 

Dallas Stars

TAX RATE31.61%

 

 

Detroit Red Wings

TAX RATE38.26%

 

 

Edmonton Oilers

TAX RATE42.78%

 

 

Florida Panthers

TAX RATE31.61%

 

 

Vegas Golden Knights

TAX RATE31.61%

 

 

Los Angeles Kings

TAX RATE41.58%

 

 

Minnesota Wild

TAX RATE40.78%

 

 

Montreal Canadiens

TAX RATE49.49%

 

 

Nashville Predators

TAX RATE31.61%

 

 

New Jersey Devils

TAX RATE38.26%

 

 

New York Islanders

TAX RATE42.15%

 

 

New York Rangers

TAX RATE42.15%

 

 

Ottawa Senators

TAX RATE47.71%

 

 

Philadelphia Flyers

TAX RATE38.56%

 

 

Pittsburgh Penguins

TAX RATE37.68%

 

 

San Jose Sharks

TAX RATE41.58%

 

 

Saint Louis Blues

TAX RATE38.58%

 

 

Tampa Bay Lightning

TAX RATE31.61%

 

 

Toronto Maple Leafs

TAX RATE47.71%

 

 

Vancouver Canucks

TAX RATE44.56%

 

 

Washington Capitals - DC

TAX RATE39.98%

 

 

Washington Capitals - VA

TAX RATE37.32%

 

 

Washington Capitals - MD

TAX RATE37.11%

 

 

Winnipeg Jets

TAX RATE46.17%

 

 
 
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The Canadian teams are at the top with the highest tax rates. Is it any wonder no Canadian team has won the cup since the cap system came in?  

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"Grow the game" means screw over/rig deck on some clubs(especially Cdn ones).

 

The NY based NHL Hindquarters will exploit any/every advantage to keep key US markets winning Cups. With that sneaky lil' *** lawyer as their ringleader, this'll go on forever.

 

They had armies of lawyers draw these CBA's up. There's no mystery, it was their intent.

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16 minutes ago, Nuxfanabroad said:

"Grow the game" means screw over/rig deck on some clubs(especially Cdn ones).

 

The NY based NHL Hindquarters will exploit any/every advantage to keep key US markets winning Cups. With that sneaky lil' *** lawyer as their ringleader, this'll go on forever.

 

They had armies of lawyers draw these CBA's up. There's no mystery, it was their intent.

I don’t believe there’s any conspiracy to keep Canadian teams down. But the fact remains there’s a competitive advantage to teams in areas with lower taxes.  

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59 minutes ago, qwijibo said:

The Canadian teams are at the top with the highest tax rates. Is it any wonder no Canadian team has won the cup since the cap system came in?  

Since the cap came in Columbus, NY Islanders, NY Rangers, Philadelphia, Buffalo, Tampa Bay, Florida, Colorado, Dallas, Minnesota, Nashville and San Jose haven't won the Cup either.  That's more teams than there are in Canada.  Some are in no tax states and only have to deal with federal tax.

 

Do you still think taxes are the reason Canadian teams haven't won the Cup?

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14 minutes ago, goalie13 said:

Since the cap came in Columbus, NY Islanders, NY Rangers, Philadelphia, Buffalo, Tampa Bay, Florida, Colorado, Dallas, Minnesota, Nashville and San Jose haven't won the Cup either.  That's more teams than there are in Canada.  Some are in no tax states and only have to deal with federal tax.

 

Do you still think taxes are the reason Canadian teams haven't won the Cup?

I don’t think it’s THE reason. But it’s a contributing factor.  Canadian teams have a difficult time attracting UFA’s or retaining their star players without overpaying to compensate for the higher taxes.  Overpaying means you have reduced cap space to ice a competitive team 

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1 minute ago, qwijibo said:

I don’t think it’s THE reason. But it’s a contributing factor.  Canadian teams have a difficult time attracting UFA’s or retaining their star players without overpaying to compensate for the higher taxes.  Overpaying means you have reduced cap space to ice a competitive team 

There's a lot of contributing factors.  How do you account for all of them?

 

Canadian players are paid in U.S. dollars so they have more local spending power than their U.S. counterparts.

Toronto players have more lucrative endorsement opportunities than players in places like Columbus or Raleigh.

Housing prices are way higher in New York than most other NHL cities.

 

Every team is going to have pros and cons.  I don't think you can expect the CBA to address every inequity.  Besides, taxes fluctuate.  Imagine having your team suddenly become over the cap because some newly elected government drops the tax rate?

 

I actually think the biggest inequality is how nutbar some of the Canadian fanbases are.  I think players will often choose the relative anonymity of playing in the States over playing in a fishbowl in Canada.

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8 minutes ago, goalie13 said:

There's a lot of contributing factors.  How do you account for all of them?

 

Canadian players are paid in U.S. dollars so they have more local spending power than their U.S. counterparts.

Toronto players have more lucrative endorsement opportunities than players in places like Columbus or Raleigh.

Housing prices are way higher in New York than most other NHL cities.

 

Every team is going to have pros and cons.  I don't think you can expect the CBA to address every inequity.  Besides, taxes fluctuate.  Imagine having your team suddenly become over the cap because some newly elected government drops the tax rate?

 

I actually think the biggest inequality is how nutbar some of the Canadian fanbases are.  I think players will often choose the relative anonymity of playing in the States over playing in a fishbowl in Canada.

I agree.  There are a multitude of factors.  And yes. Insane fan bases that cause the players to live in a pressurized fishbowl is certainly one.  But the competitor advantage that the Florida, Texas, Nevada teams have us real.  I’m just talking about leveling thst particular playing field.  There’s nothing you can do about weather, media, fan bases and so on.  

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you realize there are many tax loopholes for players

i doubt any fully pay the rates being suggested

bonuses skew tax rates

other investments, deduction, income splitting, etc, effect them

 

there is no simple solution

as i posted before, to get the fairness being sought

the nhl would have to hire accountants to review the return of each nhl player

and on that basis make adjustments to the team's salary cap

this is a monstrous task, fraught with privacy issues...

 

it is not likely to happen

leave things as they are

and let players hire tax planners to deal with their tax liabilities

Edited by coastal.view

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I’ve been beating this same drum for a couple years now - TB “team friendly” contracts aren’t really - you’d have to add a lot to get where most teams are as far as take home pay.  Also the state taxes illustrated by the op are only pairtly correct - I’m pretty sure it doesn’t include the jock tax properly - my understanding is the CALI and NY teams are right near the top of most taxed in the league.   Also each team pays taxes in each state they play - so Vegas, TB, Florida and Dallas only get the tax breaks on their home games - they pay taxes for each city they visit in the US on road games which narrows the gap.

 

There are a few calculators available by agent firms online that include all these variables - for those interested they could see what the take home is for any amount depending on what team.  After quite a lot of fiddling i noticed there differences aren’t very noticeable between most cities until you get to higher salaries (it’s all done on a sliding scale too) 5 million and up.   10 million in TB is like 11.5 in most cities.  8 closer to 9. 

 

At the end of the day four teams get about 10% more to work with - that’s like adding a Duchene or two very good support players...it’s also why TB has so much wealth and can afford such a stacked team. 

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Op came up with a simple solution Coastal your the one that complicated it. But thats the West Coast View dont want pipelines but complain about gas prices . If it wasn't for the Canucks, Vancouver would not be my town of choice., Get rid of the Provincial Income Tax add a Vat tax on every thing .You spend you pay, Simple way to lower the taxes and make Shure everyone pays their share.

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16 hours ago, qwijibo said:

The Canadian teams are at the top with the highest tax rates. Is it any wonder no Canadian team has won the cup since the cap system came in?  

These rates aren’t  entirely correct as I mentioned in my above post.  A few years ago THN ranked the highest to lowest taxed teams taking into all the factors, including the jock tax - which I’m pretty sure isn’t properly illustrated in your model - and the fact that team in the US pay taxes on every game they play there - so only their home games are taxed by their state plus jock tax and the results were a lot different then these.  Florida teams were at the top, then Dallas, then the Alberta teams, then Vancouver and the rest of the team in Canada basically west to east -then the bulk of the US teams with CALI and NY at the bottom of the pile.   Like I said google NHL player tax calculator and play around a little - there are some available from actual agencies that have all the variables included - and you might be pleasantly surprised that aside from the top four teams we do better (not a big margin but it is better) then a lot of US teams.   I do however agree that the top four teams have an unfair advantage .... thing is none of them have won a cup since the cap started either so until it actually makes a difference doubt anyone will do anything about it.

Edited by IBatch

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15 hours ago, goalie13 said:

Since the cap came in Columbus, NY Islanders, NY Rangers, Philadelphia, Buffalo, Tampa Bay, Florida, Colorado, Dallas, Minnesota, Nashville and San Jose haven't won the Cup either.  That's more teams than there are in Canada.  Some are in no tax states and only have to deal with federal tax.

 

Do you still think taxes are the reason Canadian teams haven't won the Cup?

Not even a factor.   WNP has a way worse advantage then most - EDM too both are not glamorous and the weather is bad year round (summers aren’t fun there either).   Maybe a few of the US cities are dumps too but I can’t comment as haven’t been to all of them - PHI and PIT maybe but both have quite a bit of history with hockey so .... 

 

CALI and NY teams are taxed more then all Canadian cities too - once the jock tax is added properly.   

 

Also as far as purchasing power these guys make a lot more once you do the conversion to Canadian dollars.  It matters - only Vancouver is as expensive as some of the US cities near the top of the housing market - maybe TO too.  MTL and OTT are very reasonable and EDM, WNP cheap to live in.  Not that it matters much when attracting UFAs they get tens of millions to work with by then and get way more with their money deals.   Being a contender matters a lot as does the size of the contract - WNP is probably one of the tougher markets to sell though, maybe OTT too but they’ve managed to have top teams in the past too.   

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Introduce franchise tag, each team gets one. That player’s cap does not count against the team’s cap. To keep teams from using it on bums like Clarkson or Mark Fayne if you have the franchise tag you can’t be traded and you gotta play on the team. Or something along those lines. Superstars get paid, really good teams don’t get punished for being really good. Obviously it’s not fool proof. I’m sure some smarty pants will unravel my idea. 

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On 9/15/2019 at 1:12 AM, qwijibo said:

I don’t think it’s THE reason. But it’s a contributing factor.  Canadian teams have a difficult time attracting UFA’s or retaining their star players without overpaying to compensate for the higher taxes.  Overpaying means you have reduced cap space to ice a competitive team 

 

When Stamkos was UFA and doing his rounds the Maple Leafs apparently had the CEO of Canadian Tire as part of the pitch.  It was to lure him in with the increased marketing opportunities.  Marner would probably not have as many endorsement deals playing for say Florida.   This would also need to be captured.

 

Also players are paid in US dollars and the Canadian dollar is low right now - this can be attractive for players dependent on where they ultimately spend their funds.  

 

There's also cost of living.   

 

In the US State taxes for players are based on where they render their services - i.e. where they are for the day while in Canada it's based on where they live.  A team that has a lot of travel is going to be longer out of their home base vs a team that can travel just for the day.  

 

From CapFriendly:

  • State/Provincial Jurisdiction:
    • Provincial: Residents in Canada are not subject to "jock taxes" and therefore are taxed at their location of residence (assumed to be their teams home province)
    • State: Residents of American teams are subject to "jock taxes", and are therefore taxed for their duty days at the local jurisdiction.
      • Reciprocity agreements: Simplified by assuming the tax rate for the player is the maximum of: a) The local tax rate, or b) The players state residence tax rate (Example: A player visiting Florida (no State tax) from California, will be taxed at the California rates for their duty days in Florida)

 

Edited by mll

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Here's an idea: rather than have each team with a different cap, why not change player contracts so that they all pay the same 'tax' - so if you play in Florida and pay 31.61%, and someone else is paying 49.49%, then the difference between the two is taken from your salary and given to the NHLPA. Then no players would have to pay for post-career care, no-one can complain that they're being treated unfairly, and if you choose to play in a state where the taxes are less, you're doing all of your fellow professionals a huge favor down the line.

 

Imagine the amounts you could invest in training retired hockey players for new careers, or in supporting individuals in need, or in looking after players who were never fortunate enough to play in the NHL (career AHLers, that kind of thing).

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