Why won't Molson cover for income taxes ?

[Sorinth]

It would be cool if the NHL could take income tax into account, but it would have to be retroactive because if a player is traded it would mess everything up.

Maybe the cap could be based off of net salaries, and the team organizes itself to pay what's required?

Then again, this would never happen because the current structure favours USA based teams (and in turn, disadvantages Canadian teams) which isn't really considered a "problem" for the NHL aka Gary Bettman.

Where does it end though? Should NYR get a discount because housing prices are crazy high? How much does private schooling for their kids cost in Montreal compared to other places? At the end of the day it's not just taxes, the whole cost of living would have to be factored in and that's just a giant can of worms.

And the end of the day if your making 4.3 or 3.6 after taxes it's probably not that big a deal for most players. We see players turn down that kind of money all the time to go to winning team. Not too mention sponsorship deals could more than make up the difference.

 

[The Gal Pals]

The NHL should allow teams in high income tax provinces or states increased cap room. That's the best and simplest way to fix the issue rather than come up with some complex plan to pay income taxes on behalf of each player. This way it would allow Mtl to compete more with the low income tax teams.

 

[loudi94]

The NHL should allow teams in high income tax provinces or states increased cap room. That's the best and simplest way to fix the issue rather than come up with some complex plan to pay income taxes on behalf of each player. This way it would allow Mtl to compete more with the low income tax teams.

I'm sure the tax isn't the biggest obstacle *cough*crazy ass government*cough* facing the Habs when it comes to attracting a free agent.

 

[attachetatuque]

What if the NHL was deemed the employer, and teams would only be subdivisions of the company? NHL headquarters are in NYC, and every player/team would be taxed the same, under the NYC taxation structure. (I am a noob in tax laws)

 

[Scriptor]

If company gives you money its taxable. If they give you money to cover taxes, its taxable benefit, which means taxed. You can not earn free money in North America, well not legally.

Plus what are saying it tax circumvention, you want Habs to double there payroll.

The point is correct. If I pay the equivalent of what your tax burden would be, I just gave you extra revenue that also needs to be taxed….

 

[Stjonnypopo]

Where does it end though? Should NYR get a discount because housing prices are crazy high? How much does private schooling for their kids cost in Montreal compared to other places? At the end of the day it's not just taxes, the whole cost of living would have to be factored in and that's just a giant can of worms.

And the end of the day if your making 4.3 or 3.6 after taxes it's probably not that big a deal for most players. We see players turn down that kind of money all the time to go to winning team. Not too mention sponsorship deals could more than make up the difference.

I think it is a big deal because of their egos. The agent is still happy because he's still making his 5-10% but they always argue for that last 5% of the contract, a player wants his 7.05M, not just 7M, so I think the difference in taxation is a big deal for them.

I get your point about drawing the line but taxes are a much bigger deal than the other things. Housing may be expensive but it's an investment, these guys get a 2M apartment in New York but they sell it 3 years later for 2.5M so they don't really lose.

 

[Monctonscout]

It is well known that Montreal's taxes policy makes the Habs quite a bit unattracting for free agents who are going for big paychecks compare to a state like Florida that basically has no taxes on income. Montreal players will likely lose around 50% of their yearly salary to the government which is ridiculous considering most of them will only stay in Quebec for 2-3 years.

Now there is an alternative to this and I'm not sure why it has not been discuted yet. We're one of the richer teams in the league, but with the salary cap we can't just spend up to have a 100M payroll, unfortunately. But what can Molson do, is offer the government some money per year (not sure of the amount), to cover for the players' income taxes. Which would mean the Montreal Canadiens players wouldn't be taxed on their income anymore. So $6M would become... $6M. How magical ?

Basically if Player A wants a $7M salary and Montreal offers him that... his agent will tell him that after taxes, he'll only have around 3.5M left. No way he signs here.

Molson has enough money to cover for his players' taxes. That would be one loophole he could exploit. He needs to do it. Negociate something with the government, now ! We have not won the cup in more than 20 years, everything we can put to our advantage, we need to do it. And it starts now with Vanek.

That would be a clear cap circumvention.

 

[JLP]

Where does it end though? Should NYR get a discount because housing prices are crazy high? How much does private schooling for their kids cost in Montreal compared to other places? At the end of the day it's not just taxes, the whole cost of living would have to be factored in and that's just a giant can of worms.

And the end of the day if your making 4.3 or 3.6 after taxes it's probably not that big a deal for most players. We see players turn down that kind of money all the time to go to winning team. Not too mention sponsorship deals could more than make up the difference.

Taxes and cost of living are very different things, especially as they relate to higher income earners, temporary workers and ex-pats. I am sure that for NHLers who are making a choice where to locate, when income is equal, "lower taxes" is a variable that is valued highly no question about that. There are other factors of course and their weight depends on a player's personal priorities. But "cost of living" does not vary so much at this lifestyle level.

But on the variable of "lower taxes", Montreal scores last, 30/30. Ie has the highest taxes.

 

[Agnostic]

It is well known that Montreal's taxes policy makes the Habs quite a bit unattracting for free agents who are going for big paychecks compare to a state like Florida that basically has no taxes on income. Montreal players will likely lose around 50% of their yearly salary to the government which is ridiculous considering most of them will only stay in Quebec for 2-3 years.

Now there is an alternative to this and I'm not sure why it has not been discuted yet. We're one of the richer teams in the league, but with the salary cap we can't just spend up to have a 100M payroll, unfortunately. But what can Molson do, is offer the government some money per year (not sure of the amount), to cover for the players' income taxes. Which would mean the Montreal Canadiens players wouldn't be taxed on their income anymore. So $6M would become... $6M. How magical ?

Basically if Player A wants a $7M salary and Montreal offers him that... his agent will tell him that after taxes, he'll only have around 3.5M left. No way he signs here.

Molson has enough money to cover for his players' taxes. That would be one loophole he could exploit. He needs to do it. Negociate something with the government, now ! We have not won the cup in more than 20 years, everything we can put to our advantage, we need to do it. And it starts now with Vanek.

You are obviously somebody who has no clue about personal income taxes.

 

[Fish on The Sand]

Somehow I think that's illegal. Be it federal or provincial law... Or just circumventing the cap.

If he's just simply paying the taxes for players then it's not illegal but is 100% a circumvention of the cap

 

[radicalcenter]

strong understanding of how taxes work
plus 7M before taxes /= 3,5M after taxes

 

[ProspectsFanatic]

I think the league likes that Canadian team have higher income tax, because it diminishes the gap with low budget team in the US. High budget team also already have an advantage in having more money to invest in infrastructures, coaching staff, trainers, training equipments and so on.

 

[Beaker]

Seems legit.
OP has innovative ideas.

 

[Compile]

It is well known that Montreal's taxes policy makes the Habs quite a bit unattracting for free agents who are going for big paychecks compare to a state like Florida that basically has no taxes on income. Montreal players will likely lose around 50% of their yearly salary to the government which is ridiculous considering most of them will only stay in Quebec for 2-3 years.

Now there is an alternative to this and I'm not sure why it has not been discuted yet. We're one of the richer teams in the league, but with the salary cap we can't just spend up to have a 100M payroll, unfortunately. But what can Molson do, is offer the government some money per year (not sure of the amount), to cover for the players' income taxes. Which would mean the Montreal Canadiens players wouldn't be taxed on their income anymore. So $6M would become... $6M. How magical ?

Basically if Player A wants a $7M salary and Montreal offers him that... his agent will tell him that after taxes, he'll only have around 3.5M left. No way he signs here.

Molson has enough money to cover for his players' taxes. That would be one loophole he could exploit. He needs to do it. Negociate something with the government, now ! We have not won the cup in more than 20 years, everything we can put to our advantage, we need to do it. And it starts now with Vanek.

Teams are not allowed to give players perks. Be it a house, a car, free tickets to a concert etc.

If a team is caught, they would be fined by the NHL.

 

[Compile]

What the nhl should do is include the taxes per team for the cap, so if a player like Crosby plays for the Habs, his cap hit is $10m but is paid say $12m instead.