Yet another question on the salary cap

Discussion in 'The Business of Hockey' started by type_v, Nov 11, 2005.

Thread Status:
Not open for further replies.
  1. type_v

    type_v Registered User

    Joined:
    Aug 3, 2005
    Messages:
    389
    Likes Received:
    0
    Trophy Points:
    0
    Occupation:
    Student
    Location:
    Toronto
    Is the salary cap placed before or after taxes?

    The reason I ask is that in Canada, I think you have to pay nearly 50 cents on every dollar earned after a certain amoung. I'm not sure how it workd in the US but im pretty certain that every state has a lower tax than anywhere in Canada (except for maybe Alberta now). The real question would be, has the salary cap crippled the future of Canadian teams and teams where taxes are heavier? A player can get a the same salary from two different places but may choose one based on the fact that he would get to keep more of that money.
     
  2. kdb209

    kdb209 Registered User

    Joined:
    Jan 26, 2005
    Messages:
    16,271
    Likes Received:
    5
    Trophy Points:
    126
    The salary cap is based on the gross salary paid by the team - before taxes.

    This will give a slight benefit to teams in low tax states.

    For US teams, all players will be in the top IRS marginal tax rate of 35% for federal income tax. State income taxes vary from 0% (no state income taxes in Florida, Tennessee, Texas, and a few others) to 9.3% (California).

    So the Stars and Predators and Lightning do have a not insignificant advantage over the Sharks, Kings, and Ducks, and I would assume even moreso over the Canadian teams - i'm not that familiar with Canadian federal or provincial income tax rates.

    Although, the differences due to state income tax may only affect half a players salary. Many (most?) states tax the income of visiting players as salary earned in that state, so Stars players do pay CA state tax for games against the Sharks, Kings, and Ducks.
     
  3. AdmiralPred

    AdmiralPred Registered User

    Joined:
    Jun 9, 2005
    Messages:
    1,923
    Likes Received:
    0
    Trophy Points:
    0
    Yeah kdb, you pretty much have it. My former roommate played in the Detroit Tiger organization for two years and had earnings from 10 eastern states, so I am pretty sure most, if not all, states with state income taxes follow suit.

    As an add to kdb209's post, several cities in the U.S. have local taxes on top of state taxes, if applicable, that visiting players, as well as the home team, must pay. NHL cities include Detroit, Philly, St. Louis, Pittsburgh, Columbus, and I think Dallas.
     
Thread Status:
Not open for further replies.

Share This Page

monitoring_string = "358c248ada348a047a4b9bb27a146148"