Marc Methot saving 1.4 million dollars.

[KrisLetAngry]

I don't wanna be that guy or anything but this is pretty crazy how much extra money he saved and is a big reason why certain hockey teams have a huge advantage over others.

Appreciate Methot sharing this.

Click to read more...

 

[Viqsi]

...dunno about anyone else, but I can't seem to be able to view that attached screenshot.

 

[MAHJ71]

...dunno about anyone else, but I can't seem to be able to view that attached screenshot.

nope, it appears to start to open and then closes

 

[ThatsSoSlavin]

Here

 

[MrHeiskanen]

I don't wanna be that guy or anything but this is pretty crazy how much extra money he saved and is a big reason why certain hockey teams have a huge advantage over others.

Appreciate Methot sharing this.

John Tavares signed in Toronto instead of Dallas, it's crazy how certain hockey teams have a huge advantage over others.

 

[Sol]

That's insane.

 

[Legion34]

He says over 2 years in Dallas he saved 1.4
Million.

Everyone knows this. It has been referenced by multiple players GMs agents and accountants.

Fans here pretend it’s not true..... but it is. Wait for someone to say he’s wrong

 

[Legion34]

John Tavares signed in Toronto instead of Dallas, it's crazy how certain hockey teams have a huge advantage over others.

What artificial cap did the league institute for “parity” that Tavares was able to circumvent?

 

[Regal]

Methot missed a bunch of games in Dallas. Just spending that time at home in Dallas would theoretically impact his taxes as opposed to playing out-of -state. I think the jock tax situation is far more complicated than a lot of people want to make it out to be though, and I don't think the difference between certain states/provinces is as minimal as some want to believe.

 

[Chrisinroch]

I’m confused. It appears he’s overstating the tax benefit by 2x.

12.16% Provincial tax vs 0%
2 yrs earnings: $9.8MM x 12.16% = $1.25MM but only half of that is taxed as earnings in Texas. The other half is taxed at the various rates of the places he plays away games. So his tax benefit is ≈$625k over two years. Not chicken feed but ???

 

[Deen]

I’m confused. It appears he’s overstating the tax benefit by 2x.

12.16% Provincial tax vs 0%
2 yrs earnings: $9.8MM x 12.16% = $1.25MM but only half of that is taxed as earnings in Texas. The other half is taxed at the various rates of the places he plays away games. So his tax benefit is ≈$625k over two years. Not chicken feed but ???

This guy maths.

 

[Regal]

I’m confused. It appears he’s overstating the tax benefit by 2x.

12.16% Provincial tax vs 0%
2 yrs earnings: $9.8MM x 12.16% = $1.25MM but only half of that is taxed as earnings in Texas. The other half is taxed at the various rates of the places he plays away games. So his tax benefit is ≈$625k over two years. Not chicken feed but ???

I'm pretty sure the idea that only half of it is taxed as Texas earnings is wrong. Players are paid by the day on the active roster not by the game, so it's not as simple as half and half and for Methot in particular, if he's rehabbing from injury during a lot of this time and spending it in Dallas, he's not being taxed on any of that. A team's schedule is also quite different depending on division, so it affects the various jock taxes. There's also a lot more that goes into than just the jock tax, so it's possible there were more loopholes in Texas to exploit. It's possible he could have lived in Quebec while playing for Ottawa as well, which would have increased his Provincial rate.

 

[WarriorofTime]

Hockey fans are the only sports fans I know constantly griping about tax rates. Write to your local government if it's so important to you...

 

[zizbuka]

The whole tax system needs an overhaul. The wrong people are not paying taxes, while the rest of us are covering it for the wealthy ones.

 

[boredmale]

It's easy to get around other state taxes by giving a huge bonus on July 1 and low salary during the season

 

[DistantThunderRep]

I'm pretty sure the idea that only half of it is taxed as Texas earnings is wrong. Players are paid by the day on the active roster not by the game, so it's not as simple as half and half and for Methot in particular, if he's rehabbing from injury during a lot of this time and spending it in Dallas, he's not being taxed on any of that.

Players are taxed in different ways.

A player is taxed in the city they play. This is the jock tax. But a way that players avoid jock tax is they take a lower salary and higher signing bonus. Bonuses are taxes at the players place of residence.

For example:

Player A, signs a 5 year $25M contract. The structure is that they player gets paid $1M in salary, and $4M in bonus paid on July 1st. This player lives in Dallas.

Player B, signs a 5 year $25M contract. It's all salary. $5M a year in salary. This player lives in Dallas.

Player A, will make more money. This is because $4M is taxed at the federal rate, and half (in reality slightly less than half) the salary will be subjected to the jock tax around the league. Player B will be taxed on his full salary of $5M in cities.

In Methot's case of being at home, living in Dallas at the time, means his full payout wasn't subjected to income tax and was only subjected to federal tax.

It's kind of disingenuous statement for him to make without clarifying.

That's like saying people should be pissed at Auston Matthews because his primary residence is still Arizona, meaning because of the tax treaty of America and Canada means he pays less income tax since almost all of his contract is signing bonuses.

The issue isn't no income tax states, it's the fact players can avoid the tax simply by not living in the city they play for and taking a signing bonus heavy contract.

 

[majormajor]

They could at least have the salary cap apply to post-tax income, not pre-tax. That would help even the playing field. The low-tax teams would still have a big advantage but not quite as egregious.

Just as an example, I don't know how much but something like $25m-$40m of Montreal's cap is lost to taxes.

 

[Regal]

Players are taxed in different ways.

A player is taxed in the city they play. This is the jock tax. But a way that players avoid jock tax is they take a lower salary and higher signing bonus. Bonuses are taxes at the players place of residence.

For example:

Player A, signs a 5 year $25M contract. The structure is that they player gets paid $1M in salary, and $4M in bonus paid on July 1st. This player lives in Dallas.

Player B, signs a 5 year $25M contract. It's all salary. $5M a year in salary. This player lives in Dallas.

Player A, will make more money. This is because $4M is taxed at the federal rate, and half (in reality slightly less than half) the salary will be subjected to the jock tax around the league. Player B will be taxed on his full salary of $5M in cities.

In Methot's case of being at home, living in Dallas at the time, means his full payout wasn't subjected to income tax and was only subjected to federal tax.

It's kind of disingenuous statement for him to make without clarifying.

That's like saying people should be pissed at Auston Matthews because his primary residence is still Arizona, meaning because of the tax treaty of America and Canada means he pays less income tax since almost all of his contract is signing bonuses.

The issue isn't no income tax states, it's the fact players can avoid the tax simply by not living in the city they play for and taking a signing bonus heavy contract.

There's certainly a lot of differences between players depending on where they live during the season/the offseason/what cities and states they play in/how long they spent in each one/bonuses, etc, even for players on the same team. But I think there's more to the idea of jock taxes than what it seems on the surface. Theoretically a player is taxed for what he earns in a state/city with a jock tax based on the number of days he's there, but there's a lot of anecdotal accounts that seem to suggest the difference between players who reside in states with and without taxes might be greater than this calculation would suggest. I do wonder how players account for travel and off-days between games and whether game days only end up being taxed in the grand scheme of things.

I dont really care about the implications for league parity, it's just lind of interesting how complicated this all can get. I've heard of 400 page returns and accounts of in-season vacations to Florida saving 20K in taxes.

 

[TCNorthstars]

They could at least have the salary cap apply to post-tax income, not pre-tax. That would help even the playing field. The low-tax teams would still have a big advantage but not quite as egregious.

Just as an example, I don't know how much but something like $25m-$40m of Montreal's cap is lost to taxes.

Or you could leave it like it is since it works and is simple.

 

[OppositeLocK]

It's easy to get around other state taxes by giving a huge bonus on July 1 and low salary during the season

Sorry but that's not how taxes work.

 

[majormajor]

Or you could leave it like it is since it works and is simple.

It is just as simple to have the cap apply to player income, as opposed to team payroll. Whether you think the current system "works" or not depends more on whether you are getting screwed by it or not.

 

[boredmale]

Sorry but that's not how taxes work.

If I get a bonus on July 1 while I am living in Dallas that means that bonus get taxed in Dallas. Then say my yearly salary is 1M, when I am playing in California 1/82nds of that 1M will be taxed using California state tax rates(not the bonus i got paid on July 1)

 

[ACLEVERNAME]

See it as an incentive for playing in bumb-f*** nowhere - hockey wise at least. It's basically saying I should/will choose to move down there because I could buy a handle for cents to the dollar compared to up here.

Doesn't mean it's worth it. Doesn't mean it's an automatic decision for an athlete such as myself.

 

[Mattb124]

I love it that people on thia site think they know more about how much a player paid in taxes and what he would have paid than that player and his accountant. Just stupid.

 

[JT Kreider]

The whole tax system needs an overhaul. The wrong people are not paying taxes, while the rest of us are covering it for the wealthy ones.

The whole SYSTEM needs an overhaul, not just taxes.

The one good thing that came out of the pandemic was all of us finally realizing how corrupt America is and the entire system is designed to line the pockets of the rich and eliminate the middle class.

I mean in some backwards ass way the rich made more money in 2020 than they ever had while the rest of us suffered. I don't get how that happened.