TSN: League looking at signing bonuses CBA

[82Ninety42011]

League will always say they looking at it but in reality the better the big revenue clubs do the more money the league makes. Owners say they want the Cup but money is what they are really after. Leafs, Rangers, Bruins,Flyers and other big market teams doing well means revenue. It's all about money to them. Nothing will change.

 

[TOGuy14]

This thread is hilarious because of the people claiming that taxation rates don't matter but signing bonus money is a big deal

John Tavares Could Save Nearly $12 Million In Taxes On His New Contract

Article XVI of the US-Canada tax treaty states that signing bonuses paid to a resident of the US by a Canadian team are taxed at 15% in Canada, and vice versa for US teams paying bonuses to Canadian residents.
Having his signing bonus taxed at the low rate of 15% in Canada ensures that Tavares would receive a full foreign tax credit on his US return for all taxes paid in Canada on both is signing bonus and his salary each season. If he plans properly, he could save over $11.7 million over the life of his contract.

Leafs literally structured this deal in such a way that allows him to take full advantage of favorable taxation down south, but somehow the league needs to close an awful loophole when Toronto does it?

 

[Starat327]

This thread is hilarious because of the people claiming that taxation rates don't matter but signing bonus money is a big deal

John Tavares Could Save Nearly $12 Million In Taxes On His New Contract



Leafs literally structured this deal in such a way that allows him to take full advantage of favorable taxation down south, but somehow the league needs to close an awful loophole when Toronto does it?

Again, this isnt a leafs thing. It may look like that because this story broke after the tavares signing, but hes hardly the first to do it. Ladd's contract was mostly SB, as with Stamkos.

Its an 'issue' because (and im ok with SBs [within reason] for the record) all players want these contracts now. That basically eliminates the effects of a lockout for players (theyre getting paid regardless) and completely weakens the NHLs negotiating leverage. That's it.

 

[StreetHawk]

This thread is hilarious because of the people claiming that taxation rates don't matter but signing bonus money is a big deal

John Tavares Could Save Nearly $12 Million In Taxes On His New Contract



Leafs literally structured this deal in such a way that allows him to take full advantage of favorable taxation down south, but somehow the league needs to close an awful loophole when Toronto does it?

Need a professional to deal with tax rules. I’m sure each agency has tax experts in his field to help the agents structure the best possible deal.

Residency rules are also important for tax purposes. See how far he goes each season because he would need to spend a minimum number of days in his country of residence to be considered a resident there for the year. Hockey has likely the longest season of all pro sports, almost 9 months from the start of camp to the awarding of the cup.

I’m sure that there are provisions within the tax act for residency that a hockey player would fall under that would benefit him tax wise. That’s what they pay tax accountants for.

 

[Ciao]

Yes, youll still have to share revenue. The league has made it clear that thats what it wants to do, because growth of the game is growth for everyone involved. This isnt even worth discussing, because it isnt going away.

Where did i mention in that post involuntary taxes?

Since were accounting for government and state imposed taxes - why are american teams going to get penalized because the canadian government has decided to add an X% tax to help fund its social healthcare system? No one has been able to explain that to me.

And no, I wouldnt support it. Because I dont think the tax issue is nearly as big as people make it out to be. I've stated my reasons several times for that in this thread, explained them thoroughly, and refuse to do so again. But if the league did it, as long as they were to make it all encompassing, and make sure that all hockey related income were included in cap hits (i.e. endorsements), than I would accept it.

Let me explain this to you in terms you can understand.

You have not investigated nor supported your premise that Canadians pay more in taxes to support its healthcare system.

The OECD publishes statistics on the worldwide costs of health care, including those in the United States: Health Expenditure - OECD

It is widely known and reported that the United States has the highest per capita heath case costs in the world, and the largest share of publicly funded health-care costs as a percentage of GDP:

. . . researchers note that tax-funded health expenditures in the U.S. accounted for a larger share of the gross domestic product (11.2 percent in 2013) than did the total health expenditures of any other nation.

Government funds nearly two-thirds of U.S. health care costs: American Journal of Public Health study | Physicians for a National Health Program
​

Not surprisingly, the same journal article reports that the United States has the highest health-care taxes in the world:

Direct government payments for such programs as Medicare, Medicaid and the Veterans Administration accounted for 47.8 percent of overall health spending. The analysis also identified two commonly overlooked tax-funded health expenditures – government outlays for public employees’ private health insurance coverage ($188 billion, or 6.4 percent of total spending) and tax subsidies to health care ($294.9 billion, or 10.1 percent of the total). Together, these public expenditures put the U.S. in first place for health care taxes.
​

However, since your underlying premise is entirely wrong, you might want to go back to the drawing board on this one.

 

[Ciao]

This thread is hilarious because of the people claiming that taxation rates don't matter but signing bonus money is a big deal

John Tavares Could Save Nearly $12 Million In Taxes On His New Contract



Leafs literally structured this deal in such a way that allows him to take full advantage of favorable taxation down south, but somehow the league needs to close an awful loophole when Toronto does it?

I've read the article.

It appears to be written by an American who is not knowledgeable in Canadian tax law, and does not understand the rules under the Income Tax Act concerning the definition of residence in Canada, liability for the payment of Canadian income tax on world-wide income, and the repercussions of a "departure tax" on a high-net worth individual who leaves Canada and establishes residence for tax purposes elsewhere.

Despite that, almost none of the tax savings described in the article turn on payment of employment income in the form of a lump-sum signing bonus as opposed to regular periodic payments. If one wishes to play hockey in Toronto, as the author suggests, while maintaining legal residence for tax purposes in Florida or New York, the identical tax advantages would be available. The problem is that given Canadian tax rules over residence, such a scenario would not be practical if it were even possible at all.

Any Canadian-based player wanting to try this had better hope his team holds training camp outside Canada, and does not make the playoffs, because in addition to the time spent here for regular-season games either or both of these events could jeopardize compliance with the rules on sojourning versus residence.

 

[Starat327]

Let me explain this to you in terms you can understand.

You have not investigated nor supported your premise that Canadians pay more in taxes to support its healthcare system.

The OECD publishes statistics on the worldwide costs of health care, including those in the United States: Health Expenditure - OECD

It is widely known and reported that the United States has the highest per capita heath case costs in the world, and the largest share of publicly funded health-care costs as a percentage of GDP:

. . . researchers note that tax-funded health expenditures in the U.S. accounted for a larger share of the gross domestic product (11.2 percent in 2013) than did the total health expenditures of any other nation.

Government funds nearly two-thirds of U.S. health care costs: American Journal of Public Health study | Physicians for a National Health Program
​

Not surprisingly, the same journal article reports that the United States has the highest health-care taxes in the world:

Direct government payments for such programs as Medicare, Medicaid and the Veterans Administration accounted for 47.8 percent of overall health spending. The analysis also identified two commonly overlooked tax-funded health expenditures – government outlays for public employees’ private health insurance coverage ($188 billion, or 6.4 percent of total spending) and tax subsidies to health care ($294.9 billion, or 10.1 percent of the total). Together, these public expenditures put the U.S. in first place for health care taxes.
​

However, since your underlying premise is entirely wrong, you might want to go back to the drawing board on this one.

Americans pay more for healthcare, that is true. But it isnt a wholly state funded program. The government 'subsidizes' it with lackluster programs like obamacare, but as a whole, the lions share of our taxes do not go towards a publically funded program.

I'll meet you at the drawing board you were talking about and we can talk about 2+2 once you master 1+1.

 

[Ciao]

Americans pay more for healthcare, that is true. But it isnt a wholly state funded program. The government 'subsidizes' it with lackluster programs like obamacare, but as a whole, the lions share of our taxes do not go towards a publically funded program.

I'll meet you at the drawing board you were talking about and we can talk about 2+2 once you master 1+1.

I don't think you understand where your taxes really do go, because this fact seems to escape you:

At $5,960 per capita, government spending on health care costs in the U.S. was the highest of any nation in 2013, including countries with universal health programs such as Canada, Sweden and the United Kingdom. (Estimated total U.S. health spending for 2013 was $9,267 per capita, with government’s share being $5,960.) Indeed, government health spending in the United States exceeded total health spending (government plus private) in every other country except Switzerland.

Government funds nearly two-thirds of U.S. health care costs: American Journal of Public Health study | Physicians for a National Health Program
​

Do you understand that according to this article, based on OECD data, the US spends more per capita on government-funded health care than any other country except Switzerland spends on health care in total?

FYI, I'm not a proponent of an income-tax based salary-cap adjustment, and never have been. There are many good reasons not to make such a cap adjustment, none of which have anything to do with how Canadian federal and provincial governments spend their tax revenues.

However, it pisses me off to no end when ill-informed Americans who know little to nothing about the costs of their own health-care system, let alone ours, make utterly stupid arguments about the "high cost" of Canadian health care that is dwarfed in comparison to both government and private spending in the US.

For example, you don't even seem to understand that your own governments spend far more per person in actual tax dollars on health care than Canadian goverments, and more per person in tax dollars on health care than all Canadian public and private health-care costs combined.

Shame on you for holding up such an ignorant argument.

 

[Starat327]

I don't think you understand where your taxes really do go, because this fact seems to escape you:

At $5,960 per capita, government spending on health care costs in the U.S. was the highest of any nation in 2013, including countries with universal health programs such as Canada, Sweden and the United Kingdom. (Estimated total U.S. health spending for 2013 was $9,267 per capita, with government’s share being $5,960.) Indeed, government health spending in the United States exceeded total health spending (government plus private) in every other country except Switzerland.

Government funds nearly two-thirds of U.S. health care costs: American Journal of Public Health study | Physicians for a National Health Program
​

Do you understand that according to this article, based on OECD data, the US spends more per capita on government-funded health care than any other country except Switzerland spends on health care in total?

FYI, I'm not a proponent of an income-tax based salary-cap adjustment, and never have been. There are many good reasons not to make such a cap adjustment, none of which have anything to do with how Canadian federal and provincial governments spend their tax revenues.

However, it pisses me off to no end when ill-informed Americans who know little to nothing about the costs of their own health-care system, let alone ours, make utterly stupid arguments about the "high cost" of Canadian health care that is dwarfed in comparison to both government and private spending in the US.

For example, you don't even seem to understand that your own governments spend far more per person in actual tax dollars on health care than Canadian goverments, and more per person in tax dollars on health care than all Canadian public and private health-care costs combined.

Shame on you for holding up such an ignorant argument.

There are exceptionally good reasons that the data reflects that, and its largely because the US healthcare system in inexplicably corrupt and double dips. Maybe thats just another ignorant comment from someone who isnt familiar with the US healthcare system though..

 

[Ciao]

There are exceptionally good reasons that the data reflects that, and its largely because the US healthcare system in inexplicably corrupt and double dips. Maybe thats just another ignorant comment from someone who isnt familiar with the US healthcare system though..

You are quite correct in this assessment.

Hockey is just fun and entertainment.

Health care has actual importance. It strikes a nerve with me that it is so poorly understood and administered on both sides of our border, and I wish that there were better access to good health care across North America.

Thank you for the debate.

 

[tucker3434]

League will always say they looking at it but in reality the better the big revenue clubs do the more money the league makes. Owners say they want the Cup but money is what they are really after. Leafs, Rangers, Bruins,Flyers and other big market teams doing well means revenue. It's all about money to them. Nothing will change.

The demand in those markets is more inelastic. Montréal was likely a top 3 revenue team last year, and they weren’t any good. The point of a lot of this is to make the lower revenue teams more competitive, draw more fans, and reduce their need for revenue sharing.

And also, I think even the big market teams might not love the idea that agents can demand buyout-proof contracts. They mightnot mind a tweak that changes that up a bit.

 

[Iceman]

I'm late to the party but it's obvious that the league doesn't like it. They lose leverage when working out a new cba if they threaten to cancel the season but the players still get their money.

 

[TML1967]

Im fine if the league wants to start looking at things that give some teams advantages over others.

The reason they don't like this has nothing to do with parity, and as some have said it's everything to do with the highest starts getting paid even if a lockout occurs. It makes it allot harder to squeeze them if 15% of players (no idea the real number) get paid a good amount regardless.

If we are going down the parity route, I'd like taxes to be taken into account.

As well as cost of living, as a house in New York or LA is not the same as Winnipeg.

Or the amount of endorsement money available.

The issue IMO is every city has advantages/ disadvantages which become nearly impossible to calculate if we really get down to the nity gritty.
What about cost of hydro? Like what is the point where we go.. YUP now it's allll equal!

That's why I personally prefer a soft cap with a huge cost to going over that is spread out to the rest of the league.
If the Penguins wanted to sign Tavares and go 5 million over the cap, I'm fine with that as long as they put an extra 15 million into the pot to be distributed.
IMO it's the best system as some years teams want to go over the max because all their young guys get good at once.
Or maybe do a rolling cap, like if you are 5 million under 1 year you can go half that amount over the next year or something.

 

[Notsince67]

No, im asking for us to consider all things that affect a players take home pay. What you are refusing to acknowledge for some reason, is that there are other things than 'income tax' that affect players take home pay. You want to solve part of the problem because you think its the most imapactful, without any knowledge of how each l ocal jurisdiction works.

Income tax makes states and municipalities money to pay for things.
Property taxes make states and municipalities to pay for things.

Not worth the effort to you, for sure. But what happens when city x has a .2% property tax rate and city y has a 3%( im just making numbers up here) - over the course of a 10 million/year contract, thats 280K a year, and on an 8 year deal, is over 2 million. Is that impactful enough to you?

Well you can take it down to property value too if you like.
I sure don't like it though. Rent a damn apartment if you don't like the property tax.

 

[Starat327]

Well you can take it down to property value too if you like.
I sure don't like it though. Rent a damn apartment if you don't like the property tax.

Right, cause that's reasonable.

 

[Notsince67]

Right, cause that's reasonable.

I can buy an estate property in Pittsburgh with what my average home in Toronto suburbs cost. I'm sure markets like California, Vancouver and NY have similar (if not higher) cost burdens. Penn state has no sales taxes as well. I'm not sure why we are trying to go down a road of what looks like a "progressive" exercise.
Arizona has cheaper taxes than Toronto. They may not have the cash flow to support signing bonuses but they do benefit from revenue sharing. It just seems like the moment Toronto is seen to have a slight advantage over a few teams despite it's disadvantages, the system needs to be re-rigged to prevent it.
The real answer is to put teams in viable markets that can compete.

 

[Starat327]

I can buy an estate property in Pittsburgh with what my average home in Toronto suburbs cost. I'm sure markets like California, Vancouver and NY have similar (if not higher) cost burdens. Penn state has no sales taxes as well. I'm not sure why we are trying to go down a road of what looks like a "progressive" exercise.
Arizona has cheaper taxes than Toronto. They may not have the cash flow to support signing bonuses but they do benefit from revenue sharing. It just seems like the moment Toronto is seen to have a slight advantage over a few teams despite it's disadvantages, the system needs to be re-rigged to prevent it.
The real answer is to put teams in viable markets that can compete.

To start - I've maintained from the start that signing bonuses dont need to be looked at. This isnt a Toronto thing. These contracts have become commonplace and it has much less to do with "Toronto doing it" than it has to do with the owners trying to save themselves from a poor negotiating stance. If everyone has a signing bonus laden contract, the PA has no reason to fear a work stoppage, because they still get paid. So when negotiation time comes, the PA can play hardball because the owners arent seeing any revenue, but they're paying for the product.