Should teams salary cap be based on taxable income in that location?

[Soul8]

How is it fair or equal that Tbay can sign it's elite player to a contract 9.5 because Tbay is tax free, where he would be making 11 ish maybe more in a taxable location. This in itself allows the tax to affect the competitiveness of teams directly. Should we all just become Fans of teams in tax free locations because they will naturally have the advantage when it comes to building better teams? I can't believe the NHL hasn't addressed this.

Click to read more...

 

[joestevens29]

Is it fair that no UFA is going to want to sign in Ottawa? Do we allow Ottawa a 200mil salary cap?

Although that won't matter because their owner is too cheap, which brings up another issue. How do you compensate for owners being too cheap?

At the end of the day Tampa has built their team into a contender and that has really helped them retain guys for a decent price.

Florida has the same taxes, why aren't they getting all these deals?

 

[Little Fury]

Interesting thread on this very subject on Twitter.



Read the whole thing.

 

[joestevens29]

Interesting thread on this very subject on Twitter.



Read the whole thing.

While this is very true, they still play 41 how games in a tax free state. So half their money is taxed at a very good rate.

 

[McTrashBoat]

The cap should be the same

but the contract they sign should be net. after tax

they already pay everyone in American Dollars, they really should even the playing field


edit: or how about the option for cap exempt bonuses that would pay for the tax difference

 

[bone]

How is it fair or equal that Tbay can sign it's elite player to a contract 9.5 because Tbay is tax free, where he would be making 11 ish maybe more in a taxable location. This in itself allows the tax to affect the competitiveness of teams directly. Should we all just become Fans of teams in tax free locations because they will naturally have the advantage when it comes to building better teams? I can't believe the NHL hasn't addressed this.

Is this helping Florida get an advantage living in the same state? Tampa is getting these options because they've built a quality team that looks like it can be sustainable, and players are going to want to stay there (or go there) for what will possibly be Stanley Cups, while living a pretty anonymous lifestyle. Does the tax system help, possibly, but it's only helping because of the work done previously to set up a successful team.

 

[PaPaDee]

Interesting thread on this very subject on Twitter.



Read the whole thing.

I believe this is true for players playing in US markets, but I was under the impression it was managed differently in Canada/CRA.

 

[Soul8]

The cap should be the same

but the contract they sign should be net. after tax

they already pay everyone in American Dollars, they really should even the playing field


edit: or how about the option for cap exempt bonuses that would pay for the tax difference

Contracts players sign can be manipulated by agents to still create an advantage or disadvantage, I feel a sliding cap depending on taxes is the most logical approach

 

[Little Fury]

I believe this is true for players playing in US markets, but I was under the impression it was managed differently in Canada/CRA.

Thread says they pay provincial taxes in Canada as well.

 

[PaPaDee]

Thread says they pay provincial taxes in Canada as well.

I don't have a twitter account, so I can't look at the entire thread, but is it saying players who sign contracts to play for U.S. teams, pay taxes in whatever state/province they're "working" in? Or is it saying players who sign contracts to play in a Canadian city, also pay taxes in whatever state/province they play in?

 

[McTrashBoat]

Contracts players sign can be manipulated by agents to still create an advantage or disadvantage, I feel a sliding cap depending on taxes is the most logical approach

so are bonuses all taxed on their home tax rate?

 

[Paralyzer]

How is it fair or equal that Tbay can sign it's elite player to a contract 9.5 because Tbay is tax free, where he would be making 11 ish maybe more in a taxable location. This in itself allows the tax to affect the competitiveness of teams directly. Should we all just become Fans of teams in tax free locations because they will naturally have the advantage when it comes to building better teams? I can't believe the NHL hasn't addressed this.

Well let's look at the last 8 Stanley Cup Teams and see where they rank in Taxes, Highest is the LEAST amount of Taxes (Using McDavid's contract as the example in every team: Connor McDavid Post-Tax Earnings - CapFriendly - NHL Salary Caps):

2010	Chicago Blackhawks (WC) (11, 4–7)	#6
2011	Boston Bruins (EC) (18, 6–12)	#9
2012	Los Angeles Kings (WC) (2, 1–1)	#24
2013	Chicago Blackhawks (WC) (12, 5–7)	#6
2014	Los Angeles Kings (WC) (3, 2–1)	#24
2015	Chicago Blackhawks (WC) (13, 6–7)	#6
2016	Pittsburgh Penguins (EC) (5, 4–1)	#12
2017	Pittsburgh Penguins (EC) (6, 5–1)	#12
2018	Washington Capitals (EC) (2, 1–1)	#10

[TBODY] [/TBODY]

Looking that that, It plays in somewhat but not really. Then again, look at the teams listed below:

TEAM	FEDERAL RATE	STATE RATE	CITY RATE	ESTIMATED TAX RATE	TAX PAID	NET SALARY

[TBODY] [/TBODY]

Nashville Predators		39.31%	-	-		39.31% (-8.50%)	$5,896,170	$9,103,830 (+$1,275,145)
Vegas Golden Knights		39.31%	-	-		39.31% (-8.50%)	$5,896,170	$9,103,830 (+$1,275,145)
Florida Panthers		39.31%	-	-		39.31% (-8.50%)	$5,896,170	$9,103,830 (+$1,275,145)
Tampa Bay Lightning		39.31%	-	-		39.31% (-8.50%)	$5,896,170	$9,103,830 (+$1,275,145)
Dallas Stars		39.31%	-	-		39.31% (-8.50%)	$5,896,170	$9,103,830 (+$1,275,145)
Chicago Blackhawks		39.31%	3.75%	-		43.06% (-4.75%)	$6,458,670	$8,541,330 (+$712,645)
Arizona Coyotes		39.31%	4.53%	-		43.84% (-3.97%)	$6,576,131	$8,423,869 (+$595,184)
Colorado Avalanche		39.31%	4.63%	-		43.94% (-3.87%)	$6,590,670	$8,409,330 (+$580,645)
Boston Bruins		39.31%	5.10%	-		44.41% (-3.40%)	$6,661,170	$8,338,830 (+$510,145)
Washington Capitals (Virginia)		39.31%	5.75%	-		45.06% (-2.75%)	$6,758,412	$8,241,588 (+$412,902)
Carolina Hurricanes		39.31%	5.75%	-		45.06% (-2.75%)	$6,758,670	$8,241,330 (+$412,645)
Pittsburgh Penguins		39.31%	3.07%	3.00%		45.38% (-2.43%)	$6,806,670	$8,193,330 (+$364,645)
Detroit Red Wings		39.31%	4.25%	2.40%		45.96% (-1.85%)	$6,893,670	$8,106,330 (+$277,645)
Philadelphia Flyers		39.31%	3.07%	3.91%		46.29% (-1.52%)	$6,943,170	$8,056,830 (+$228,145)
St. Louis Blues		39.31%	6.00%	1.00%		46.31% (-1.50%)	$6,945,945	$8,054,055 (+$225,370)
Columbus Blue Jackets		39.31%	4.98%	2.50%		46.79% (-1.02%)	$7,018,392	$7,981,608 (+$152,923)
Vancouver Canucks		-	-	-		47.52% (-0.29%)	$7,128,028	$7,871,972 (+$43,287)
Calgary Flames		-	-	-		47.81%	$7,171,315	$7,828,685
Edmonton Oilers		-	-	-		47.81%	$7,171,315	$7,828,685

[TBODY] [/TBODY]

 

[Soul8]

Well let's look at the last 8 Stanley Cup Teams and see where they rank in Taxes, Highest is the LEAST amount of Taxes (Using McDavid's contract as the example in every team: Connor McDavid Post-Tax Earnings - CapFriendly - NHL Salary Caps):

2010	Chicago Blackhawks (WC) (11, 4–7)	#6
2011	Boston Bruins (EC) (18, 6–12)	#9
2012	Los Angeles Kings (WC) (2, 1–1)	#24
2013	Chicago Blackhawks (WC) (12, 5–7)	#6
2014	Los Angeles Kings (WC) (3, 2–1)	#24
2015	Chicago Blackhawks (WC) (13, 6–7)	#6
2016	Pittsburgh Penguins (EC) (5, 4–1)	#12
2017	Pittsburgh Penguins (EC) (6, 5–1)	#12
2018	Washington Capitals (EC) (2, 1–1)	#10

[TBODY] [/TBODY]

Looking that that, It plays in somewhat but not really. Then again, look at the teams listed below:

TEAM	FEDERAL RATE	STATE RATE	CITY RATE	ESTIMATED TAX RATE	TAX PAID	NET SALARY

[TBODY] [/TBODY]

Nashville Predators		39.31%	-	-		39.31% (-8.50%)	$5,896,170	$9,103,830 (+$1,275,145)
Vegas Golden Knights		39.31%	-	-		39.31% (-8.50%)	$5,896,170	$9,103,830 (+$1,275,145)
Florida Panthers		39.31%	-	-		39.31% (-8.50%)	$5,896,170	$9,103,830 (+$1,275,145)
Tampa Bay Lightning		39.31%	-	-		39.31% (-8.50%)	$5,896,170	$9,103,830 (+$1,275,145)
Dallas Stars		39.31%	-	-		39.31% (-8.50%)	$5,896,170	$9,103,830 (+$1,275,145)
Chicago Blackhawks		39.31%	3.75%	-		43.06% (-4.75%)	$6,458,670	$8,541,330 (+$712,645)
Arizona Coyotes		39.31%	4.53%	-		43.84% (-3.97%)	$6,576,131	$8,423,869 (+$595,184)
Colorado Avalanche		39.31%	4.63%	-		43.94% (-3.87%)	$6,590,670	$8,409,330 (+$580,645)
Boston Bruins		39.31%	5.10%	-		44.41% (-3.40%)	$6,661,170	$8,338,830 (+$510,145)
Washington Capitals (Virginia)		39.31%	5.75%	-		45.06% (-2.75%)	$6,758,412	$8,241,588 (+$412,902)
Carolina Hurricanes		39.31%	5.75%	-		45.06% (-2.75%)	$6,758,670	$8,241,330 (+$412,645)
Pittsburgh Penguins		39.31%	3.07%	3.00%		45.38% (-2.43%)	$6,806,670	$8,193,330 (+$364,645)
Detroit Red Wings		39.31%	4.25%	2.40%		45.96% (-1.85%)	$6,893,670	$8,106,330 (+$277,645)
Philadelphia Flyers		39.31%	3.07%	3.91%		46.29% (-1.52%)	$6,943,170	$8,056,830 (+$228,145)
St. Louis Blues		39.31%	6.00%	1.00%		46.31% (-1.50%)	$6,945,945	$8,054,055 (+$225,370)
Columbus Blue Jackets		39.31%	4.98%	2.50%		46.79% (-1.02%)	$7,018,392	$7,981,608 (+$152,923)
Vancouver Canucks		-	-	-		47.52% (-0.29%)	$7,128,028	$7,871,972 (+$43,287)
Calgary Flames		-	-	-		47.81%	$7,171,315	$7,828,685
Edmonton Oilers		-	-	-		47.81%	$7,171,315	$7,828,685

[TBODY] [/TBODY]

I feel it will begin to play more and more of a factor, as we are hearing more signings influenced by the taxes in that location. Kuch being the most recent.

It is pretty simple, if I gave you 80 million tax free, and 80 million taxed depending on location, which option provides you the potential to acquire the most? That is simple, now if a GM of a team isn't good enough to utilize this to his advantage, they likely won't last in this league.

 

[Gord]

How is it fair or equal that Tbay can sign it's elite player to a contract 9.5 because Tbay is tax free, where he would be making 11 ish maybe more in a taxable location. This in itself allows the tax to affect the competitiveness of teams directly. Should we all just become Fans of teams in tax free locations because they will naturally have the advantage when it comes to building better teams? I can't believe the NHL hasn't addressed this.

I don't see why the NHL should have to spend considerable resources to track the taxes of every NHL location and come up with a salary cap formula.

should the NHL also give salary cap credits for places like Edmonton that are further away and have worse weather? NY should be penalized for having more cultural opportunities and a great nightlife?

this is one of those times you have to realize life isn't always fair and you need to suck it up. you should worry more about getting a GM who can manage the salary cap that worrying about the tax burden on players. or getting a team that makes the playoffs more than once every 13 years.

 

[oXo Cube]

Or maybe the Lightning are just a well run organization with an elite roster and a GM that has convinced his stars to buy in?

This new thing where we cry about taxes is rather embarrassing quite frankly.

 

[joestevens29]

I feel it will begin to play more and more of a factor, as we are hearing more signings influenced by the taxes in that location. Kuch being the most recent.

It is pretty simple, if I gave you 80 million tax free, and 80 million taxed depending on location, which option provides you the potential to acquire the most? That is simple, now if a GM of a team isn't good enough to utilize this to his advantage, they likely won't last in this league.

This option has been around forever. It's only becoming an issue now because people are made at how good of a team Tampa has put together. Not their fault they drafted and made smart trades.

It's not like ARI and COL are that much more in taxes, why do they suck?

 

[joestevens29]

Man could you imagine if Kucherov signed his 8 year deal 3 years ago instead of a bridge deal? He'd probably be making only 6 or 7mil

 

[Soul8]

I don't see why the NHL should have to spend considerable resources to track the taxes of every NHL location and come up with a salary cap formula.

should the NHL also give salary cap credits for places like Edmonton that are further away and have worse weather? NY should be penalized for having more cultural opportunities and a great nightlife?

this is one of those times you have to realize life isn't always fair and you need to suck it up. you should worry more about getting a GM who can manage the salary cap that worrying about the tax burden on players.

If the nhl wants to implement a salary cap to encourage parity, then sometimes it has to do work! Not sure if the NHL can control how climate affects team building and player recuitment, but having a sliding cap certainly can be a fairly easy way to encourage parity. Wait a couple more years when Kcu, Stammer, Hedman, and Karlsson(ifthey get him) are all signed to valued contracts. That will clearly give them a leg up on the league. To me it is a matter of time before this becomes a glaring issues. I only began to recognize it myself this morning.

 

[oXo Cube]

If the nhl wants to implement a salary cap to encourage parity, then sometimes it has to do work! Not sure if the NHL can control how climate affects team building and player recuitment, but having a sliding cap certainly can be a fairly easy way to encourage parity. Wait a couple more years when Kcu, Stammer, Hedman, and Karlsson(ifthey get him) are all signed to valued contracts. That will clearly give them a leg up on the league. To me it is a matter of time before this becomes a glaring issues. I only began to recognize it myself this morning.

The salary cap wasn't put in place to enforce parity. It was to enforce cost certainty.

Parity is what the draft and RFA status is for.

 

[Soul8]

Or maybe the Lightning are just a well run organization with an elite roster and a GM that has convinced his stars to buy in?

This new thing where we cry about taxes is rather embarrassing quite frankly.

Are taxes a factor? Yes they are, pretending they aren't would be naive, how would everyone feel if Chiarelli didn't do his best to leverage every deal for cap sake? Some people have to be realistic. Call it embarrassing if you are inspired to, it doesn't change the fact that it has the potential to affect a teams salary cap. How many people wish the Oilers had more salry cap room right now, Raise your hand? If there was no salary cap this wouldn't be a consideration.

 

[Soul8]

The salary cap wasn't put in place to enforce parity. It was to enforce cost certainty.

Parity is what the draft and RFA status is for.

I feel that you are partially right, parity was a consideration as well.

 

[Little Fury]

I don't have a twitter account, so I can't look at the entire thread, but is it saying players who sign contracts to play for U.S. teams, pay taxes in whatever state/province they're "working" in? Or is it saying players who sign contracts to play in a Canadian city, also pay taxes in whatever state/province they play in?

Basically any player anywhere will pay whatever local taxes apply to the place they're playing in.

 

[joestevens29]

Why isn't this a discussion in any other sport? Why have the Miami Dolphins and Jackonsville Jags sucked forever if they have this advantage?

Why did the super team go from Miami to Golden Stat in the NBA?

There is more to it then taxes. Every city has pros and cons, no way to make a salary cap based on the numerous variables that exist in North American sports.

 

[oXo Cube]

Are taxes a factor? Yes they are, pretending they aren't would be naive, how would everyone feel if Chiarelli didn't do his best to leverage every deal for cap sake? Some people have to be realistic. Call it embarrassing if you are inspired to, it doesn't change the fact that it has the potential to affect a teams salary cap. How many people wish the Oilers had more salry cap room right now, Raise your hand? If there was no salary cap this wouldn't be a consideration.

They sure are a factor, and there are a ton of markets that are a lot more attractive than Edmonton for a bunch of different reasons.

The problem with this angle is that you are using it as an excuse for failure. You can say that we would be better off with some sort of protection for this and you would be right, but at the end of the day anyone who signs on to be the GM here is taking on the job of making the team better and is(or should be) well aware of what he(or she) is getting into.

 

[Soul8]

They sure are a factor, and there are a ton of markets that are a lot more attractive than Edmonton for a bunch of different reasons.

The problem with this angle is that you are using it as an excuse for failure. You can say that we would be better off with some sort of protection for this and you would be right, but at the end of the day anyone who signs on to be the GM here is taking on the job of making the team better and is(or should be) well aware of what he(or she) is getting into.

The thing is...it isn't a GM flaw, it is a salary cap flaw. I am not making it an excuse to fail, I am aware it provides a potential benefit to certain teams and not others in terms of recruiting better players for less which can be adjusted for parity sake.