Death and Taxes...

[King Heffy]

20 minutes ago, UKNuck96 said:

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 

Really only hurts the Canadian teams that don't spend to the cap like Ottawa.  Aquilini, for example, has always been willing to spend extra to build a contender.  

[Rick Blight]

5 minutes ago, IBatch said:

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.   

How is Canada gaining? There is a good reason the NBA PA says this product gives the Raptors an unfair advantage over their U.S counterparts.

Are players in Canada with NTC/NMC's crazy for not wanting to be traded to a tax free state?

Why would you sign a below market contract to play in Florida if it didn't come with a NTC/NMC? Did Bobrovsky really take less than market value to play there?

 

This is far more complicated than simply looking at income tax comparison charts. What about U.S. cities that charge "city income tax"?

 

I see no proof that players are willing to sign for less money in states that have no state tax. In Canada we always talk about players signing "home town discount" contracts but when that happens in Florida, Texas, etc we all say it is because of an unfair tax advantage and I just don't see that.

 

[UKNuck96]

3 minutes ago, King Heffy said:

Really only hurts the Canadian teams that don't spend to the cap like Ottawa.  Aquilini, for example, has always been willing to spend extra to build a contender.  

If a team spent to the cap do you think Canadian owners would be happy to be a cap team and have to pay 15/20% more plus any additional tax liability for being the employer in their province.

 

yes Aqua man has always spend to the cap, but moving the burden onto the owners isn’t the way to solve this issue 

[PistolPete13]

2 hours ago, UKNuck96 said:

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 

US citizens playing in Canada, don’t pay an American citizen tax. They have to file a US tax return and calculate taxes payable. Then they claim a foreign tax credit for Canadian taxes paid.

 

Since Canadian tax rates are higher than US tax rates, the foreign tax credit reduces US taxes payable to nil.

 

One possible solution is for the Canadian federal government and provinces to institute a jock tax for all players on US teams who play games in Canada.

 

My involve is in the mail.

[IBatch]

33 minutes ago, PistolPete13 said:

US citizens playing in Canada, don’t pay an American citizen tax. They have to file a US tax return and calculate taxes payable. Then they claim a foreign tax credit for Canadian taxes paid.

 

Since Canadian tax rates are higher than US tax rates, the foreign tax credit reduces US taxes payable to nil.

 

One possible solution is for the Canadian federal government and provinces to institute a jock tax for all players on US teams who play games in Canada.

 

My involve is in the mail.

This is why we won't buy property ever in the US- we have to then also report to them as well.   

[IBatch]

2 hours ago, Rick Blight said:

How is Canada gaining? There is a good reason the NBA PA says this product gives the Raptors an unfair advantage over their U.S counterparts.

Are players in Canada with NTC/NMC's crazy for not wanting to be traded to a tax free state?

Why would you sign a below market contract to play in Florida if it didn't come with a NTC/NMC? Did Bobrovsky really take less than market value to play there?

 

This is far more complicated than simply looking at income tax comparison charts. What about U.S. cities that charge "city income tax"?

 

I see no proof that players are willing to sign for less money in states that have no state tax. In Canada we always talk about players signing "home town discount" contracts but when that happens in Florida, Texas, etc we all say it is because of an unfair tax advantage and I just don't see that.

 

Not sure what your getting at here.  Bobrovsky was a terrible signing but you can bet he was stoked and for sure it was the best deal out there.   Like i said - go to the gavingroup tax calculator it's all there a plain as day.   All taxes factored in depending on where you want to go.  

Edited October 5, 2021 by IBatch

[Rick Blight]

27 minutes ago, IBatch said:

Not sure what your getting at here.  Bobrovsky was a terrible signing but you can bet he was stoked and for sure it was the best deal out there.   Like i said - go to the gavingroup tax calculator it's all there a plain as day.   All taxes factored in depending on where you want to go.  

I understand the differences in the base tax calculations but that does not necessarily translate into what NHL players are paying. As noted earlier an RCA will greatly reduce your tax rate.

However, I believe the point you are trying to make is in your statement "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". I believe the inference is, and correct me if I am wrong, that these teams can sign players to lower level contracts because of the lower taxes. Or, conversely, other teams have to offer larger contracts to get a player to sign in a Vancouver, Toronto etc. If this is not the advantage, what is it?

 

The point I was trying to make is that I do not see evidence of this advantage teams in these locations have. I know you will be able to provide examples of players such as  Stamkos to make a point that he took less money to stay in the state of Florida. And I will be able to point out Vancouver players over the years that took "hometown discounts" so is there really a difference between the two?

 

I don't dispute that some players would prefer to play in these states, all things being equal, but I don't see that being a wide spread problem. Do you feel that UFA's all check out those teams 1st before they will accept a contract in a city without the lower tax rates? 

If so, I guess we will just have to agree to disagree.

 

Tampa is the only franchise  in a state without state income tax that has won a Stanly Cup in the 2000's so has it really been that advantageous? And would we really be having this discussion if Tampa hadn't won the past two Cups?

 

Anyways, good discussion.....cheers.

[IBatch]

8 minutes ago, Rick Blight said:

I understand the differences in the base tax calculations but that does not necessarily translate into what NHL players are paying. As noted earlier an RCA will greatly reduce your tax rate.

However, I believe the point you are trying to make is in your statement "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". I believe the inference is, and correct me if I am wrong, that these teams can sign players to lower level contracts because of the lower taxes. Or, conversely, other teams have to offer larger contracts to get a player to sign in a Vancouver, Toronto etc. If this is not the advantage, what is it?

 

The point I was trying to make is that I do not see evidence of this advantage teams in these locations have. I know you will be able to provide examples of players such as  Stamkos to make a point that he took less money to stay in the state of Florida. And I will be able to point out Vancouver players over the years that took "hometown discounts" so is there really a difference between the two?

 

I don't dispute that some players would prefer to play in these states, all things being equal, but I don't see that being a wide spread problem. Do you feel that UFA's all check out those teams 1st before they will accept a contract in a city without the lower tax rates? 

If so, I guess we will just have to agree to disagree.

 

Tampa is the only franchise  in a state without state income tax that has won a Stanly Cup in the 2000's so has it really been that advantageous? And would we really be having this discussion if Tampa hadn't won the past two Cups?

 

Anyways, good discussion.....cheers.

I don't know if i predicated this in this thread - but never felt it was an issue until two years ago when 3 of the 4 teams were all in the conference final.   Last year 2 of the 4.   So .... guess we will find out. 

[Rick Blight]

1 minute ago, IBatch said:

I don't know if i predicated this in this thread - but never felt it was an issue until two years ago when 3 of the 4 teams were all in the conference final.   Last year 2 of the 4.   So .... guess we will find out. 

Don't forget Nashville as well so it was really2 of 5........that should make you feel a little better!

[erkayloomeh]

On 10/5/2021 at 8:14 AM, 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.  

Explain? They get more dollars when converted to Canadian bucks but those bucks are worth less. 

[erkayloomeh]

On 10/5/2021 at 9:49 AM, King Heffy said:

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

Ahhhhh.  Good idea.   

[Alflives]

4 minutes ago, erkayloomeh said:

Explain? They get more dollars when converted to Canadian bucks but those bucks are worth less. 

Players prefer US cities because they and their families live anonymously.  They don’t take their jobs home.  10 million in the US is 12.5 up here.  It’s not about taxes.  It’s about lifestyle.  

[erkayloomeh]

1 minute ago, Alflives said:

Players prefer US cities because they and their families live anonymously.  They don’t take their jobs home.  10 million in the US is 12.5 up here.  It’s not about taxes.  It’s about lifestyle.  

If you could choose to be the mascot for any nhl team who would you choose.? 

I'll bet Vancouver. 

[CBH1926]

On 10/5/2021 at 11:27 AM, NewbieCanuckFan said:

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

 

 

Probably thought he was drafted to Siberia.

[Elias Pettersson]

1 hour ago, erkayloomeh said:

Explain? They get more dollars when converted to Canadian bucks but those bucks are worth less. 

The money is only worth less if it is spent outside of Canada.  If you live, work and spend your time mostly in Canada then that 20% exchange rate offsets the extra taxes.  If you are Canadian and your employer is paying you in US dollars that's a huge advantage to anyone.  Canadian players won't have an issue playing in Canada.  American players who want to spend their offseason in the US and invest their money down south will have an issue.  

[Elias Pettersson]

On 10/5/2021 at 4:30 PM, Rick Blight said:

I understand the differences in the base tax calculations but that does not necessarily translate into what NHL players are paying. As noted earlier an RCA will greatly reduce your tax rate.

However, I believe the point you are trying to make is in your statement "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". I believe the inference is, and correct me if I am wrong, that these teams can sign players to lower level contracts because of the lower taxes. Or, conversely, other teams have to offer larger contracts to get a player to sign in a Vancouver, Toronto etc. If this is not the advantage, what is it?

 

The point I was trying to make is that I do not see evidence of this advantage teams in these locations have. I know you will be able to provide examples of players such as  Stamkos to make a point that he took less money to stay in the state of Florida. And I will be able to point out Vancouver players over the years that took "hometown discounts" so is there really a difference between the two?

 

I don't dispute that some players would prefer to play in these states, all things being equal, but I don't see that being a wide spread problem. Do you feel that UFA's all check out those teams 1st before they will accept a contract in a city without the lower tax rates? 

If so, I guess we will just have to agree to disagree.

 

Tampa is the only franchise  in a state without state income tax that has won a Stanly Cup in the 2000's so has it really been that advantageous? And would we really be having this discussion if Tampa hadn't won the past two Cups?

 

Anyways, good discussion.....cheers.

An RCA only works if you are planning to spend the rest of your life in Canada.  It is similar to an RRSP for athletes.  It's not going to work if you are American and want to take your money out to use and invest in the US.

[Rick Blight]

58 minutes ago, Elias Pettersson said:

An RCA only works if you are planning to spend the rest of your life in Canada.  It is similar to an RRSP for athletes.  It's not going to work if you are American and want to take your money out to use and invest in the US.

Sports agents have long bemoaned the tax rates that high-salaried Canadian-based athletes face. ... 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.

 

 

What Happens After a Trade or Retirement?

If the player is traded or signs with another team, the assets of the RCA are not affected until withdrawals commence and, if a player decides after the conclusion of his career to become a non-resident of Canada for tax purposes, the RCA withdrawals will be subject to the tax treaty between Canada and his new country of residence. If the treaty with the new country directs that “periodic” or “lump sum” pension payments are not subject to taxation as income by the new country, the RCA trust will remit between 15% – 25% withholding tax to Canada, and no further tax will be levied.

Edited October 7, 2021 by Rick Blight

[Elias Pettersson]

42 minutes ago, Rick Blight said:

Sports agents have long bemoaned the tax rates that high-salaried Canadian-based athletes face. ... 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.

 

 

What Happens After a Trade or Retirement?

If the player is traded or signs with another team, the assets of the RCA are not affected until withdrawals commence and, if a player decides after the conclusion of his career to become a non-resident of Canada for tax purposes, the RCA withdrawals will be subject to the tax treaty between Canada and his new country of residence. If the treaty with the new country directs that “periodic” or “lump sum” pension payments are not subject to taxation as income by the new country, the RCA trust will remit between 15% – 25% withholding tax to Canada, and no further tax will be levied.

With the RCA a player would have 50% of their salary tied up until they decide to pull it out.  As Brian Burke mentioned, the players need to hold back 20% for escrow and 10% for salary deferral.  So a player making $5 million a year only collects $3.5 million of that amount.  If 50% is put into an RCA then that still leaves $1.75 million to be taxed.  The player would receive take home pay of $875,000 while the other $1.75 million is being held in the RCA.

 

So in order for an NHL player to successfully avoid paying large Canadian taxes in Canada, a player earning a $5 million annual salary would only have $875,000 available to them every year.  Also, as Burke mentioned if a player wants to buy a multi million dollar home they would be able to write off the mortgage intertest on that home in the US but that doesn't apply here in Canada.  So that is another $50-100k in lost salary if living in Canada.

 

The RCA only works if a player is comfortable living on 50% of their net salary and doesn't want to touch the other 50% until their retirement.  It doesn't work well if you are wanting to invest in other vehicles outside of Canada.

[UKNuck96]

2 hours ago, Elias Pettersson said:

With the RCA a player would have 50% of their salary tied up until they decide to pull it out.  As Brian Burke mentioned, the players need to hold back 20% for escrow and 10% for salary deferral.  So a player making $5 million a year only collects $3.5 million of that amount.  If 50% is put into an RCA then that still leaves $1.75 million to be taxed.  The player would receive take home pay of $875,000 while the other $1.75 million is being held in the RCA.

 

So in order for an NHL player to successfully avoid paying large Canadian taxes in Canada, a player earning a $5 million annual salary would only have $875,000 available to them every year.  Also, as Burke mentioned if a player wants to buy a multi million dollar home they would be able to write off the mortgage intertest on that home in the US but that doesn't apply here in Canada.  So that is another $50-100k in lost salary if living in Canada.

 

The RCA only works if a player is comfortable living on 50% of their net salary and doesn't want to touch the other 50% until their retirement.  It doesn't work well if you are wanting to invest in other vehicles outside of Canada.

Key wording - up to, not 50% but up to 50%

[73 Percent]

On 10/5/2021 at 10:14 AM, 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.  

Canadian goods cost more money. 

 

Case of beer in the USA is 16$. Same case in canada is 40.

 

When gas is 1.25 cad is usually .80c canadian in the us.