Death and Taxes...

[IBatch]

I've been vocal about the difference in take home pay for several years now between teams with no state tax and those that have state tax, plus jock tax and of course the Canadian teams. 

 

To me it's a bit of a joke really, players on Dallas, Vegas, Tampa Bay, Panthers and now Seattle hold a distinct advantage over other teams. 

 

As a case study - Gavingroup offers NHL players a quick and easy way to determine their take home pay compared to any other team - and has the tax rates visibly available and they adjust them every year.  

 

Vancouver, TO, MTL, and OTT are all at the highest bracket.   53%.   The aforementioned teams are all at 36.29%. 

 

What does that mean?  Well look at this:

 

5,000,000 deals $817,500 variance.

6,000,000 deals $982,200 variance. 

7,000,000 deals $1,148,000

8,000,000 deals $1,312,000

9,000,000 deals $1,477,800

10             deals $1,643,000

 

81.5   - 13,439,350 

 

That's a significant advantage.   Sure for top echelon stars their could be better places to earn extra income with endorsements.   So that's a factor.    And these are only the blue chip guys that are play drivers too.   But the point is, that's a lot of extra players teams can sign and build with and they have and are doing that.   TB roster in particular.   They kept Stamkos - who was offered a lot more in TO and SJ.   That extra year however made up for it as did the extra couple million in tax savings each year. 

 

Should the NHL and NHLPA work on making this more balanced in the next CBA?  Or are things fine the way they are?   Have to add when the Sedins peaked we actually were in the bottom third of least taxed teams, same with Alberta.  Jock and different state tax does make quite the bracket difference.   Alberta teams are taxed a little more but are still hanging in ok.  

 

[Alflives]

Canadian dollar is about 20-25% less than US buck.  Guys are paid in US dollars.  So, when those US dollars are converted to Canadian funds (for guys playing in Canadian cities) add 20-25%.  So really it’s a saw-off, if not an advantage to play in a Canadian City.

imo players choosing US cities is about the anonymity they and their families get.  

[IBatch]

20 minutes ago, Alflives said:

Canadian dollar is about 20-25% less than US buck.  Guys are paid in US dollars.  So, when those US dollars are converted to Canadian funds (for guys playing in Canadian cities) add 20-25%.  So really it’s a saw-off, if not an advantage to play in a Canadian City.

imo players choosing US cities is about the anonymity they and their families get.  

For sure...except Canadian players living in the US still have the same buying power and ability to buy a house wherever they want too in Canada as well.    Not to mention cars cost 1/3-1/2 in the US ... luxury ones.   And food/gas/ pretty much everything is cheaper even with the exchange rate.   And out of country players could also buy Canadian real estate - if they so wished too.   This makes the real estate a wash or non-factor.   The only thing i see as an advantage, is endorsements for marquee players....but even then both Crosby and McKinnon enjoy that too, with Tim Hortons and other Canadian companies, living in the US and in cities that don't charge nearly as much. 

 

 

Edited October 5, 2021 by IBatch

[IBatch]

Elliotte Friedman touched on this recently, saying less and less free agents want to play in Canada.   High taxes, crazy markets and inability to enjoy their riches because of Covid were cited as the reasons.   One of those will go away.    It's a disturbing trend.   Glad we at least have made a considerable effort to corner the Swede market.   Sweden and Canada have a lot in common thankfully geographically.   It's a climate they are used too.   Also a socialist society compared to the US which might help some.    Niche market lol.   But it is concerning.   Money talks.   And losing .817k on a five million deal is the difference between a lot of things over a short career.     Doesn't matter where you go with the calculator once your over a million.    I also figure this is why Miller is a grumpy guy at times. Also why NTC/NMC in these five places are worth gold. 

Edited October 5, 2021 by IBatch

[I.Am.Ironman]

13 minutes ago, IBatch said:

Elliotte Friedman touched on this recently, saying less and less free agents want to play in Canada.   High taxes, crazy markets and inability to enjoy their riches because of Covid were cited as the reasons.   One of those will go away.    It's a disturbing trend.   Glad we at least have made a considerable effort to corner the Swede market.   Sweden and Canada have a lot in common thankfully geographically.   It's a climate they are used too.   Also a socialist society compared to the US which might help some.    Niche market lol.   But it is concerning.   Money talks.   And losing .817k on a five million deal is the difference between a lot of things over a short career.     Doesn't matter where you go with the calculator once your over a million.    I also figure this is why Miller is a grumpy guy at times. Also why NTC/NMC in these five places are worth gold. 

Yeah I don't think Miller is loving the trade... Former team wins 2 cups; he gets rewarded with higher taxes and more scrutiny. All speculation of course, it could just be his personality. But I'll be surprised if he stays after his deal.

[jatylo]

To be fair I am not sure if there would be any Canadian team if I made the NHL either. I don't have it in me to join the C of Red even though I live in Calgary and Ottawa would be the best spot for a low profile but high taxes.

 

Playing for the Panthers, minimal media exposure and nice weather. Plus pressure of playing in the playoffs once every 10 years sounds more appealing 

[King Heffy]

The cap should be based on Net pay instead of gross pay.  Problem solved.

[NewbieCanuckFan]

10 minutes ago, jatylo said:

To be fair I am not sure if there would be any Canadian team if I made the NHL either. I don't have it in me to join the C of Red even though I live in Calgary and Ottawa would be the best spot for a low profile but high taxes.

 

Playing for the Panthers, minimal media exposure and nice weather. Plus pressure of playing in the playoffs once every 10 years sounds more appealing 

Florida…COVID central.   No thanks.  Sure those millionaires live in another world than us plebs but would you want to raise a family in that environment?  Near full if not full ICUs, pray you don’t need emergency hospital services or you’ll experience longer wait lines than even here in Canada (unless you’ve been exiled to Alberta).

[IBatch]

1 hour ago, I.Am.Ironman said:

Yeah I don't think Miller is loving the trade... Former team wins 2 cups; he gets rewarded with higher taxes and more scrutiny. All speculation of course, it could just be his personality. But I'll be surprised if he stays after his deal.

Miller is a gamer and a pro for sure.   Love the guy and hope he either stays with a similar long term deal or we trade him to a contender next TDL or possibly even this off season.   If we don't well at least we got him for a couple hundred games and he can go join a long list of former Canucks we had that made an impact.   If i had to compare him to my favourite Canuck team all-time it would be Geoff Courtnall.  Played with us around the same amount of games, a little older for sure but also a icon of sorts given what he accomplished with us.    JT Miller is one of the better trades we've made since the cap came in.   Considering a first gets you a rental or maybe a guy with one year left.   Super versatile.    I'm actually ok with him just walking too.   If we make the playoffs this year and next, a lot of that will be because we have him.   

[IBatch]

27 minutes ago, NewbieCanuckFan said:

Florida…COVID central.   No thanks.  Sure those millionaires live in another world than us plebs but would you want to raise a family in that environment?  Near full if not full ICUs, pray you don’t need emergency hospital services or you’ll experience longer wait lines than even here in Canada (unless you’ve been exiled to Alberta).

Pro athletes get pro treatment.   As do their families in the states.   Way better treatment then the average joe in Canada.   

[NewbieCanuckFan]

2 minutes ago, IBatch said:

Pro athletes get pro treatment.   As do their families in the states.   Way better treatment then the average joe in Canada.   

I guess I still remember Steve "Crying like a baby" Francis reaction when he was drafted by Vancouver.

 

 

[IBatch]

41 minutes ago, jatylo said:

To be fair I am not sure if there would be any Canadian team if I made the NHL either. I don't have it in me to join the C of Red even though I live in Calgary and Ottawa would be the best spot for a low profile but high taxes.

 

Playing for the Panthers, minimal media exposure and nice weather. Plus pressure of playing in the playoffs once every 10 years sounds more appealing 

Bingo.   Bet your there age too correct?  It's not just a problem cap wise.   It's also a generational problem.    Millennials and gen whatever #easyrouteimspecial  ... not sure i'm doing that right but it is part of the issue  nowadays.   And it's in the NHL as well.    Only a couple gen x's left.   Now it's usually about me and me and me and my team.   There is no "I" in team.   But there is a me!   Just kidding ... kind of ... but thanks for being honest.    I'd play in Siberia if i had the chance to play in a semi-pro hockey league.   That also shows my age. 

[IBatch]

43 minutes ago, King Heffy said:

The cap should be based on Net pay instead of gross pay.  Problem solved.

Yes problem solved.   I agree.   And also think it is becoming a problem. 

[Kragar]

2 hours ago, I.Am.Ironman said:

Yeah I don't think Miller is loving the trade... Former team wins 2 cups; he gets rewarded with higher taxes and more scrutiny. All speculation of course, it could just be his personality. But I'll be surprised if he stays after his deal.

Then we owe it to him to win a couple Cups here!

[Caboose]

Its amazing how few people understand how this works. Typical excuse to justify Canadian teams subpar management.

 

A guy who makes it his business to maximize player earnings doesn't seem to think this is a problem. 

 

 

 

[I.Am.Ironman]

37 minutes ago, Caboose said:

Its amazing how few people understand how this works. Typical excuse to justify Canadian teams subpar management.

 

A guy who makes it his business to maximize player earnings doesn't seem to think this is a problem. 

 

 

 

Interesting... What's the catch?

[Rick Blight]

Financial advisers recommend their high-income clients, such as professional athletes, use a vehicle called a Retirement Compensation Arrangement (RCA) to help offset high income taxes. In basic terms, an RCA allows an individual to sock away up to half of their salary each year and delay accessing it until retirement, when the individual may well be living somewhere else and paying a far lower tax rate.

 

He has also tried to put them in place for Toronto Raptors basketball players, but the National Basketball Association’s collective bargaining agreement bans the practice. The NBA felt the implementation of RCAs gave the Raptors, the sole franchise outside the United States, “an unfair advantage,” according to Mr. Parry.

[IBatch]

47 minutes ago, Caboose said:

Its amazing how few people understand how this works. Typical excuse to justify Canadian teams subpar management.

 

A guy who makes it his business to maximize player earnings doesn't seem to think this is a problem. 

 

 

 

It was fun watching Burke...he gets it - so do the players.    There is no "20% flat tax bracket" in Canada - what is Walsh actually getting at?  That's total BS.   Having taken university level finance and accounting it's news to me.   Rich people may be able to incorporate themselves and pay dividends that's about it.   Same thing exists in the US - plus like Burke said they can also deduct their mortgage interest.   So ... Is Waldo just trying to stir the pot?   I've read quite a lot about this, and sure i'm not a expert - but like Burke said and he's no idiot, US players have a massive advantage with income if they play in one of the five states that don't charge the extras.   Even a league min contract pushes you into the upper bracket in Canada.    Walsh is just trying to get clients.

[UKNuck96]

3 hours ago, King Heffy said:

The cap should be based on Net pay instead of gross pay.  Problem solved.

Owners wouldn’t agree to it and it doesn’t solve the issue.

 

tax is complicated. What about for the American players who play in Canada and have to pay in addition to the Canadian taxes the ‘American citizen tax’ 

 

what about those that use tax vehicles to minimise their tax liability? 
 

it’s not simple, and yes teams in low tax states get a benefit but even if you fixed the issues around how to manage a net pay cap it would mean that owners in high tax areas would be paying more for players (and likely increasing their own tax liabilities) while at the same time if that team was also Canadian they would also be contributing a higher amount of profit anyway to profit share so in essence moving from gross to net would just make it more likely teams would leave Canada, and I doubt any Canadian owner would agree to it 

[IBatch]

13 minutes ago, Rick Blight said:

Financial advisers recommend their high-income clients, such as professional athletes, use a vehicle called a Retirement Compensation Arrangement (RCA) to help offset high income taxes. In basic terms, an RCA allows an individual to sock away up to half of their salary each year and delay accessing it until retirement, when the individual may well be living somewhere else and paying a far lower tax rate.

 

He has also tried to put them in place for Toronto Raptors basketball players, but the National Basketball Association’s collective bargaining agreement bans the practice. The NBA felt the implementation of RCAs gave the Raptors, the sole franchise outside the United States, “an unfair advantage,” according to Mr. Parry.

Sure - but there is also called something the "future value of money"... and Canada is gaining more then the players in this case.   Players in the US in those five cities take it all - and then invest it.   It worth a heck of a lot more then differing that amount of taxes.