@@justinrogers1807 Let's not pretend that politics have anything to do with taxes on that level. Once you get to the high 6, 7, 8 figures in a year, you're going to pay more in taxes (as you should, in my opinion, it's not like they'll miss it all that much). States like Florida can get away with low to no income tax due to a variety of factors. Florida specifically has bustling tourism more or less all year round thanks in no small part to their theme parks and beaches, plus as a cruise depot it's close to the Keys, Bahamas, Mexico, etc.
When I was in the military here in Canada, they had a cost of living adjustment that was dependant on where you lived. You would get more money every month if you lived in Toronto vs in Saskatchewan. It wouldn't be too hard for the NHL to figure that out.
In Canada the income tax system has "equalization" payments between provinces who are net contributors to provinces who are net recipients essentially administered by the federal government. As you can imagine the recipients think it is fair and the contributors think it is not. I can't imagine the NHL would even attempt to try to create some sort of program similar to that at the league level.
Just set the salary cap at “take home” pay based on where their arena is. Yes playing in other cities will be different taxes per game, but leave that to the accountants. Everybody’s take home should be the same no matter what market they’re in. No team would be paying the same payroll tax to their respective government, because every state/province have different payroll tax, but the players “take home” pay should be the same no matter where they’re playing. That’s the only way you can actually make a fair salary cap. It’s either that, or remove the cap again because it’s obviously more advantageous to low payroll tax places. Yes, Toronto would pay more to their government in pay roll taxes than Tampa, but that’s just the cost of having an NHL team in a high tax market. You have to remember, these NHL teams make an absurd amount of money. Toronto had no problem with paying high salaries and high taxes before the salary cap era, and I’m sure they wouldn’t mind paying more payroll tax to the government if it means the league would be fairer in terms of signing players. Like they said, leave the numbers to the accountants.
Edit: I thought this "pay different taxes at away games" was incorrect because it sounded so ludicrous (I myself deal with weird tax things, because I'm an American working for an American company, but at an overseas office in a country where I have residency due to said work, and my work routinely includes travel to other countries or states a few times per year). This is an asinine policy that makes absolutely zero sense and goes against what nearly every other cross-state or travelling employee has to do in almost any other industry. (Note: it only applies to a handful of cities, so not every away game gets a "jock tax").
@@jsquared1013 nice! That actually would make it easier for the accountants to make a “take home” salary cap much easier. I was basing that info from the video. Thanks for the fact check!
In the state of Florida, Sam Reinhart will pay just over $3 million a year in taxes. He would pay an extra $1.4 million in New York, $1.3 million in Toronto and $1.1 million in California. Over the course of his eight-year deal, he would save more than $10 million by playing for the Panthers instead of the Maple Leafs. How is that fair?
It is completely fair. They live in a place with higher taxes. If they wanna save money. Fight the state government or principality or whatever they do in Canada. Its not the NHLs problem. It's the players problem. Make a difference where you are. You wanna pay less taxes fight the system where you are. The reason it sucks is because there aren't enough people that are fighting for lesser taxes t I begin with in these areas.
It's fair because part of paying taxes go to quality of life. Sam's wife and children have to pay for medical expenses, while in Canada, they would not. Also the math you suggest is very simple while the reality for all players is much more complicated.
This is a simple fix, allow teams with higher taxes to spend over the cap the same percentage they pay more in taxes compared to the leagues lowest. Done. Cost of living is irrelevant, like it costs a lot less to live in MTL then so and so … for an average citizen, lots of players became bankrupt here despite the low cost of living because it’s nearly irrelevant to their lifestyle as a stat. A millionnaire athlete will have similar expenditures no matter where he plays.
So, essentially, you're advocating for a tax system that discriminates in favor of hockey players who happen to play in Canada, but not, say, Utah. Are you also advocating for a tax system that creates a specific category of privilege between Canadian-signed players and other run-of-the-mill Canadians? If we create a special grant of government that favors a specific category of workers over others, isn't that unfair, if not illegal? Canadian teams don't win Stanley Cups because the tax system in America favors the player; they don't win Stanley Cups because they put together shi*ty teams and drastically overpay a few players based on star power (see: "Core Four", Draisaitl and McDavid) and, therefore, can't afford the support and role players they need. I'm a native New Yorker who currently lives in Raleigh, NC. The "cost of living": argument is bullcrap when you stop to consider that housing, food, utilities, etc, are just as expensive in Raleigh as they are in New York; the difference is in the state and local tax rates. I'm not an expert on Canadian taxes, but I'm guessing the same is relatively true there, especially in enclaves full of spend-everyone-else's-money liberals (see: Ontario). Perhaps if teams can't affords the marquee players, they should go about building their teams differently in the financial sense(see: any team ever GM'ed by Lou Lamoriello, not named Toronto who have cash flying out of their orifices but decided to put the franchise in the hands of a guy who learned his craft playing NHL2014 in GM mode, anyway ). Lou would not have put 50% of his cap into four players for the next decade so that he couldn't afford quality defense and goaltending. That's probably why they fired him in Toronto. Wanting to make a splash was more important than building a winner that could be financially supported. Perhaps if more teams in Canada took a more-holistic approach to team building, rather than throwing money at a few players, they'd be more successful? But, hey, Canada, keep trying to find excuses for the Cup drought. I enjoy them immensely.
I agree with most of what you're saying, but the line "housing, food, utilities, etc, are just as expensive in Raleigh as they are in New York" is _LAUGHABLE_ . I lived in Raleigh for four years, spent all of my youth and a good chunk of my adult life elsewhere in NC, and most of my extended family (aunts/uncles/cousins) have lived in Long Island for decades. Rent for a small apartment in NYC costs double or more what a mortgage for a moderately-sized multi-bedroom house costs in most parts of Raleigh. Gas is less expensive, utilities are less expensive. Unless you're comparing to somewhere upstate vs tech-exectuive parts of Cary or some such, it's not even close. But then again when most people think "New York hockey" they are probably going to say NYR or Islanders before they say Sabres, so I stand by my use of NYC as the comparison.
@@jsquared1013 P.S I just paid 40 bucks for a ribeye and some cut watermelon this afternoon. Raleigh is not cheap, especially when the supermarket workers all get $20 an hour.
This is dumb. Because the taxes in california are also different from texas, and the taxes in michigan are different than new york. this would be impossible. Its nearly a non issue. Not the NHL's problem to solve. We could argue advantages outside of cap all day. Should michigan be able to spend more because the weather is better in florida? its basically the same argument. Of course a certain amount of people would prefer one over the other. At that rate just remove the cap again completely and if your market thrives it thrives if it falls it falls. And on that, last i checked detroit has the 2nd richest owner in sports, and he doesnt live in florida, was it unfair when there was no cap and detroit was dominant for nearly 30 years? NOBODY thought that.
@@jsquared1013 sure but you can’t expect to balance anything on income tax and refuse to take into account something else. Further, I think the lowest rate in Canada is higher than our highest. So it really sounds like a skill issue
Should it also be adjusted for endorsements? Tavares makes far more in endorsements than Barkov despite Barkov being a much better player. He makes more because he plays in a big hockey market
They completely miss the boat regarding where games are played here. Taxes are all paid in the State of residence: "State tax reciprocity means you can live in one state and work in another without being taxed in your work state. Instead, you only pay taxes to the state you live in. If no relevant state tax reciprocity agreement exists between your residence state and work state, you may need to file taxes in both." All States will either have a reciprocity, meaning the resident needs to only file in the resident state, OR they will give a credit for taxes paid elsewhere, so the net tax rate never changes from the home state.
@@alanpaul9481 no stupid each player files a state income tax in Massachusetts,NY, NJ, Pennsylvania, Ohio, Michigan, Maryland, North Carolina, Illinois, Missouri, Minnesota Colorado, Utah/AZ, California
This is by far the simplest and most clear solution. Whatever percentage difference teams have to pay more in taxes would be added onto the cap. Therefore, if I wanna overpay $1 million to a player to make him get 10 million here instead of 9 million there, it doesn’t crush me against the cap
@@louismcintyre4725 are you going to punish the teams that have way more lucrative endorsement possibilities like Toronto as you are the tax less ones like you propose to do to TB, Nashville etc .? You can't fairly attack one or 6 teams advantage and not attack teams like Toronto and Detroit and Montreal who have other financial advantages for players.
@@danmac9336NHL is not responsible for endorsements outside of the league. You're also paid in endorsements based on how good you are not everybody gets them. Last I checked Stamkos, Crosby, McDavid and Mackinnon are in commercials the most. What do all these players have in common?
When Stamkos signed in Tampa the last time he was a free agent he signed a friendly deal because there was no state tax. For The Leafs to have gotten him they would have had to pay $11-12 million to equal what he got in Tampa. Taxes matter based on the deals players get.
The NHL is the only league even remotely talking about this , admittedly because they're the only league with numerous Canadian teams. The NBA and MLB aren't talking about it. "But they don't have a hard cap like the NHL!" Fair point. The NFL has an equally hard cap, and there is no talk of equaling the difference between playing in New York or California vs Florida.
NFL is also rolling in money and the cap is WAY higher, so "role players" get compensated more, and are arguably less critical to championship contention due to the differences in field time / ice time for "below superstar" players in each sport.
People say that players have the choice of where they want to play. In reality there's only a handful of players that actually have a choice of where they play. Most free agents have 2 to 3 options unless they want to get underpaid
The bottom line here is SDPN is trying to find a way to allow the Leafs to sign more players because they are always up against the cap due to their ongoing mismanagement. If the situation was in the Leafs favor, there would be no discussion.
Not only would there be discussion, something would've already been done by now. League has historically been okay with a lot of things so long as the Leafs are victims as opposed to benefactors.
Maybe no one should be taxed at 50+ percent. Other than that tax codes have consequences. People everyday to tax advantage areas. California’s move to Nevada and Texas. There’s no way to fix its. Everything isn’t fair. How can Ottawa afford to pay even more for players? Stop taxing people to fn death.
Adam thinking this is simple is the biggest indicator he knows very little about tax. It would be insanely complicated to do fairly. It’s not on the NHL to equalise tax rates. Lots of markets have different advantages. Endorsement deal potential, history, original 6, fan base, weather, tax rates, team strength, where a player is from. Quit crying about it, use the advantages you have and get on with it.
Exactly every sport deals with this. Athletes have do the same everywhere. Also how much are you taxed on 10m in Toronto as opposed NYC or LA. Adam thinks the nhl is larger than the IRS?
Best comment here. Whenever Adam talks at length, I have the sudden urge to turn off my phone. EDIT: Maybe too harsh what I said, but the whole time Adam was speaking I was like "there's no way it's as simple as you're making it"
Oh too true. If it was a simple fix... a major sports league would have already done it. Some problems even are greater... as some states/municipalities have other taxes that are NON-Income related that effect pro-sports players. If it was an easy thing, someone would do it. An how to do it fairly.. good luck with that. On top of that. How many players don't live where they play? For MLB players, how many make their home in the dominican Republic where their incomes probable make up half the countries GNP. I bet most teams realize it can be an issue, but also know it's next to impossible to solve.. The easy fix.. move all teams out of Canada because theirs is beyond rediculous.. oh that would go over well. How many players still make their home in canada but play in the US? Again, impossible to solve and give up... it's not the teams complaining so much as the fan bases.. who really have not clue as to how much of a difference it really is.
@@ericcus2487in Toronto you would pay $5,320,356 for exactly 10m in revenue while in la you would pay $5,236,686. The thing that you don't understand is that this video isn't advocating for just Canadian teams to get a increased cap, but for a cap to be based on your state/province's taxes rate. Californian teams would benefit almost as much as a Ontario team would, and probably slightly more than an alberta team (Alberta has a low provincial income tax). The idea is to make it more balanced players aren't just only going to Florida and other low tax states because so they can actually make what they are worth after tax. To put it in perspective, you would need to be paid 17.2 million annually in Toronto to make over 8 million after taxes, I don't need to tell you thats absurd. It gives an advantage to other teams that could be avoided. Heck if you wanted I could make a spreadsheet in like 15 minutes that would detail how each state or province that has an nhl team would have a different cap and what it would be, its not that hard.
Eric Duhatschek put out an article on The Athletic about a month talking about this is less of a problem than it seems. These tax advantages have always been in place, yet only the fiur of the last five champions (TB, TB, VGK, FLA) are teams from no-tax states to win the Cup. (And people like to put * on both of TB's wins, even if they're both legitimate championships.) TB and FLA were terrible in the late 2000s/early 2010s, and nobody talked about taxes then. Nobody credis TB for drafting their core role-players (or how their salary cap hell has now bitten them hard by having to let Stamkos go), or FLA for trading for and signing their contributors and grit, or VGK for capitalizing big time in the expansion draft and then making bold decisions thereafter. Not to mention, there's only a certain amount of contracts any team can sign. It's not like every free agent wants to go there.
I'm with Adam on this. If you're getting paid in the State you work in for 41 Home games, you're going to pick the state with the lowest Taxes, if you can help it. It's the Home games that should be the focus. Not the away games.
Edit: I thought this "pay different taxes at away games" was incorrect because it sounded so ludicrous (I myself deal with weird tax things, because I'm an American working for an American company, but at an overseas office in a country where I have residency due to said work, and my work routinely includes travel to other countries or states a few times per year). This is an asinine policy that makes absolutely zero sense and goes against what nearly every other cross-state or travelling employee has to do in almost any other industry. (Note: it only applies to a handful of cities, so not every away game gets a "jock tax").
Ah yes because southern teams have always dominated free agency and the trade market. I mean look at the Florida Panthers from 2000-2020, they always got elite players because of the taxes
@@GreekInThe6ix That was right after the lockout, and it has been said several times that they were retirement deals, as well as other deals. That is all Florida was looked at as back then. There was no urgency to win.
... but, but, but... the NHL cap limit is not a limit on "lifestyle" or "community". It's a limit on salary. The NHL *loves* to create loopholes for itself. Thanks for bringing up the topic of how the NHL bleeds Canadian markets, guys.
The Canadian Federal and Provincial Governments bleeds NHL teams and players with their idiotic tax policies. Same goes with states like California, New York, Washington, et al.
How about if you play for a Toronto team you get more sponsorship dollars than in I dont know Arizona? It would be ridiculous for the NHL to account for that when it comes to cap. Why would the NHL take care of one money variable and not the other 100....
Canada already has tax breaks in place for people based on where they live and work (Northern Living Allowance) … so some type of balancing system for people based on where they live and play in the NHL is definitely possible
I think the simplest solution would be to put the cap on take-home pay (after tax) and then compensate the owners on the other end by making HRR an after tax value as well. In theory that should mostly come out in the wash but level the real dollars playing field more.
This entire concept of income tax fairness vs unfairness is ridiculous. So many years teams in low tax areas do poorly and no one wants to sign there. Recently florida teams have stable and competent ownership and management and this is a hot button item.
But players went to Tampa because of the tax break and were willing to sign for less. Many players say it that they'll take less to play for a team where there are less taxes.
@@DBeau73 and the nice year-round weather for their families, numerous entertainment options (restaurants, theme parks for the kids, concert venues, etc), and a host of other factors.
@@jsquared1013 Yeah, call hurricanes nice year round weather! It feels like you are trying to compare Buffalo to Florida here when you talk about restaurants and concert venues. You forgot to add mass shootings in there. And the way that the Republican's are going, they seem to be at war with Disney, so the theme park is about to go.
It is a blanket. All of these players get into the highest income bracket within their particular areas. You can easily calculate the total taxes paid at each lower level within each state - ie its going to be 23 (players) times each of the lower brackets, then the highest bracket times the remaining difference between the lower rates and the aggregate cap. That gives each team its own cap which would be the equitable cap throughout the league, while ALSO incentivizing teams to spend to the cap. Since it only adjusts pay UP, the players won't complain.
Adam is on another planet. What he is proposing is allowing teams to overspend over the cap, meaning giving players more than 50% of HRR. Name the owner (not the GM) that wants to increase the amount of money going to players? Even MLSE is quite happy to have a cap on salaries.
It doesn't have to be an increase to the cap in high tax jurisdictions, it can be a lowering of the cap in low tax jursidictions, Of course, then the PHA would be pissed. Most likely, it would be a mix of both so that the average cap remains the same and some team caps go up and some go down.
New York has a very high state income tax. Teams in tax free states have a huge advantage when it comes to signing free agents and retaining players. Nashville signed three huge free agents this summer in Steven Stamkos, Jonathan Marchessault, and Brady Skjei. So many players want to play in Las Vegas now because Nevada has no state income tax.
You do realize that rangers best defenseman and highest point scorer are both free agents signings right? Also Vesey and some others. Ny has always been a hot landing spot for free agents. Usually some no name players like Jagr, Gretzky and Graves though. Islanders tend to do okay in free agency and buffalo absolutely sucks in that category. Although this year they signed Lafferty, Zucker, Aube-Kubel, Reimer and some others for pretty reasonable deals. I don't know state of New York seems to be pretty mixed bag when it comes to free agents but at least rangers is one of the hottest spot for them in the entire league.
Here is my suggestion for how to do this very simply. I suggest that every player in the NHL get a net pay of 50% of their gross. If his gross is $10M, he will get $5M. If his actual net is really $7M, then the $2M difference gets paid back to the NHL and goes into a pool. At the end of the year, the pool is divided evenly between all the teams and added to the team's salary cap. So, if the pool has $64M in it, each team gets a cheque for $2M and the cap is increased by this amount. Simple. Fair. Players know exactly where they stand.
All contracts should be tax true out adjusted thus they would have the same take home pay no matter the location. I do this with our payroll nationwide. Also means people get “raises” when tax goes up but that number should not matter to the salary cap.
The NHL should have equalization payments for teams in high tax markets. e.g. If a team pays $US 88 million for salaries in Florida, versus $US 88 million in Ontario, then the Ontario teams should get a top-up funded by the league to account for the higher income taxes in Ontario. Suppose it is 10%. Then a team will distribute that extra cash to its players in proportion to their percent of the salary cap. If a player is traded from an Ontario team to a Florida team, they would lose the top-up. If a player is traded from a Florida team to an Ontario team, then they would gain the top-up. Either way, there should be no net change in monetary compensation (in a perfect world), or much less net change in monetary compensation (in an imperfect world).
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Simple fix is to adjust the cap and give teams x percent more space to pay for the players taxes. That way teams with no income tax get the usual $85M cap and other teams would get like a small percentage boost to offset the tax advantage
It's a lot more simple than what they're making it out to be. There are NHL states that have zero income tax, therefore 0% is the starting point. Beyond that, the teams have a sliding scale of cap adjustment based on their state/provincial income tax. They can make it as simple as whatever the tax percentage is for income over $1M/year is the percentage you increase that team's salary cap. It's not as if the salary cap is government issued. The NHL and NHLPA decide/negotiate the number. They can implement this system without issue. When player A decides to sign with Dallas for $9M aav because they will make more than they would signing in Montreal for $11M aav, the salary cap system is broken and some teams are at a huge advantage. Which defeats the purpose of a salary cap (to create parity).
The best way that everything is fair is to have the owners pay the player's taxes that way, it will make it more about negotiating with players and less about which place is better for me. If an owner wants to bring in a player without overspending, the cap, then they must pay their taxes.
I think the solution is bias towards undercompensating rather than overcompensating. The last thing you want is a high tax team getting a literal advantage. Use the no-tax states as the baseline. If Montreal is almost 18% higher than those teams, then give Montreal something like a 6% overage. It moves in the direction of parity without creating chaos.
Adam is correct. Simple this does not need to affect salaries. Salary cap per team is calculated the same as now. However percentage advantage which can easily be figured out for low tax states is added to teams overall Cap. This is the major reason a Canadian team has not won the cup since 1993. Please tell me the mathematical odds of a Canadian team not winning cup 36 years.
This is an incredibly complicated issue. I’ve given it a lot of thought over the years. How about implementing contracts with a net salary for the players and have a CAP also based on NET? It would make a huge headache for the teams and accountants which is why they would be against it (just thinking of a player being traded mid season is giving me a headache tbh), but I honestly don’t see any other simple way to make things equal from the player’s take home pay point of view, ignoring all other aspects. Players might use the next CBA to argue for this, but I don’t think it’s going to work out.
There has to be a scale when it comes to the cap. The problem is with those teams hurt by higher taxes, you can’t stop those GM’s from being irresponsible with that extra room, overpaying, and driving the contracts up.
Increasing the cap for high tax areas only helps if those high tax areas have enough income to spend more. For teams that already struggle to spend to the cap that in fact means they'll have to no longer be as close to the ceiling and they'll drift closer to the floor. Rather than a cap increase what would make more sense would be a cap penalty to teams with an advantage but the NHLPA would of course never go for that because it'd mean less pay for the players in those markets. Which is why doing this can't work. Most of the Canadian teams couldn't afford to have to pay players 20% more forget about potentially even higher. Most of the high tax U.S. teams couldn't bare the burden either. For every New York that can afford it you have a New Jersey or District of Columbia who can't.
They could have tiers for cap relief for high tax areas. Scale of 0-5. 0 is tax free states and 5 would be the highest. Each tier gets an assigned percentage of cap relief to balance things a bit
The only way I see this working is if the organizations pay the tax for the players. The cap would need to be adjusted to fix this, could get messy with different tax breaks (such as a player donating to charity) and it still creates a disadvantage for teams located in higher tax regions but it at least takes that consideration out of the players options when choosing where to play.
The problem is once you start looking at individual team's income tax information, why are we not also looking at other aspects of the states a player who plays in Toronto May pay more income tax, but they're also much more likely to get a contract with some other company for ads. You can't control for every variable, so the only fair way to do it is simply to keep the way it is now and teams will have to just play on their merits
One more item - true parity means whole spend is equal, not just players. The Leafs and habs advantages would go away with not being able to spend more on triple coaches and scouts.
Just allow a salary adjustment on the cap so teams can pay a bit more for a player but have adjusted percentage not count against the cap or allow the league to compensate teams that have to adjust.
Do we also factor in how much each team is able to spend on support staff? Analytics departments? Potential for endorsements? Sports science divisions? Other perks?
Simply adjust every team max cap space so they're equivalent to the lowest taxed State or city where a NHL team is located. I don't understand how this would so complicated
@@elomellow1623 I'm not upset at all. I'm just amused by the mental gymnastics people use to justify cap circumvention. Although to be fair, if those rules were written in, it wouldn't then be circumvention. I'm just curious what part is unfair? If a player signs in say, TOR or NYR, they made a career decision based on as many factors they could think of; taxes are just one of those factors, albeit a large one.
Not mentioned is what happens to players who live outside NA during the offseason? They pay a different tax rate for their countries plus have an adjusted tax rate for what they make in NA depending on where they play. There isn't an easy solution as there are too many hands in the pot.
Did you figure the state income tax Bennett or any other Florida, Tennessee,Texas, Nevada, or Washington State player pays on US road games? That will reduce the difference because they are required by US law to pay NY state income tax on games played in Buffalo, NYR, NYI,. NJ State income tax to games played at the rock California taxes on games played in ANA, LA, SJ ETC....
@@danmac9336 NHL players generally play the same amount of games in higher and lower tax Provinces and States. The location of the team they play for dictates their income most.
I would think to do contracts by "net" pay, not "gross" pay. Keep the taxes as they are and etc, but only count the salary cap by the player's net pay after taxes on paper.
When the lists of ten teams players don't want to play for are equally distributed between all 32 teams then there will be an equal plying field for all teams.
@SDPN if a player can take home an extra 1.4 Million per year on $10M AAV in one market vs another that's an extra $10M over 7 years which makes good players always choose those markets to play in. To assist in this the NHL would need to calculate at the beginning of the season the gap per martlet and allow an adjusted cap for each team vs the market either the advantage. Example: Florida has a 90M cap in 2026 --- Montreal 15% tax disadvantage - Montreal Adjusted new cap: 103.5M NY 10% tax disadvantage - adjusted new cap: 99M And so on.
Jesse- your point is to money management; Also, I was unaware that players file a return for each city they play in. Bt the point is not for the players to have parity but for the teams to have parity on the cap. S o the adjustments needs to be applied to the teams not the player. So the teams like in Floridia will have less cap to work with because the players are more likely to go there for tax reasons So hypothetically Fla has a zero-income tax for its residence so a player can live there more comfortably. Conversely NY has a 4-10.9 % income tax all nhl player would be at the 10.9 so NY teames (Islanders, aRngers and Buffalo) would have !0.9% higher cap this is a sweeping generality. A bean counter would need to come up with the exact numbers. That is the crux of the issue that GM's see a disadvantage to their teams. This in my opinion can be addressed by a soft cap Bettman being an NBA man will probably go this direction. With the tax advantage being the overage adjustment. So in the previous senario the NY teams would have an 10.9% overage in simple terms This will probably be addressed with LTIR cap rules as one item. to level the playing field.
I work in Ontario and live in Quebec and I pay Quebec taxes. The company has to adjust it or else I'd have to pay extra to the IRCC. I figure it's the same for NHL players.
in the states you pay tax to the state you live in not where you work. so if I live in Indiana and work in Ohio I would have to pay Indiana state income.
True parity would ensure that every single player on the exact same salary takes home the same amount. Sure cost of living is higher in say New York over Nashville but at least the player in New York will have the more expensive home that can be sold of they more to Nashville.
So, now that couple south teams have won in past 5 years, suddenly the tax thing is an issue? How has south not dominated the whole cap era with their unfair advantages? Or is it just about the Great Canadian Drought?
I think its simply change of culture now in the NHL. Players are realizing this stuff and are more aware now than 10-20 years etc ago. Do I understand some players want to play in Florida with year round summer instead of a cold climate Canadian team? Sure. But Also saving millions of dollars throughout your career is Also nice and would purposely choose those teams over other desirable locations. I'm glad this is being looked at.
@@LEGOBrandoOh brother. Another stupid comment. First off once the southern teams start losing hockey will lose it's luster. Hockey is just a novelty in Florida and North Carolina. We here in Buffalo have not even sniffed the playoffs in 13 years yet we still are a hockey town.
@captainahab4325 The issue isn't how much of a "hockey town" the low-tax cities are, or how well they are supported by the locals when they don't win. The issue is that these cities currently have a massive advantage to keep themselves from becoming a team that doesn't win, or to rebuild quickly if that happens. That advantage is the fact that everyone knows they don't have to pay as much to get players to sign with them as other teams would have to pay for the exact same players. This means you can afford to pay less for the foundational players, which leaves more to fill out the roster with better supporting players (who ALSO will take less) than teams in high-tax cities can afford.
The Cap in US dollars Covert to Canadian dollars That convert into Canadian Is now the American dollar value for Canadian Teams Then the cap will be different for Canadian teams and American teams The extra money to Canadian teams can equal out the playing field a bit.
I think you guys are looking at this wrong. You allow the teams in high tax areas to exceed the cap by flat percentage. Example in Montreal, where the tax rates are higher, they could have a cap that’s 10% higher than the league average. Maybe in Toronto is 5%. That way the teams are allowed to spend more and could pay players more comparatively.
I don’t think there can be a financial parity solution in the NHl. You are not just arguing country taxes, or state taxes, but also city and county taxes as well as geographic impacts. The NHL shouldn’t be responsible for all of this! Every month those taxes are changing for someone and how can you expect them to manage all of that? That’s just crazy and the pressure should be on those “districts” legislating taxation rather than the NHL.
The purpose of the cap isn't parity. It's to provide cost certainty to the owners. That's why I don't see the NHL (aka the owners) being in any rush to implement something like this. And if they didn't, it would end up with the players in Florida getting a lower cap, not Toronto getting a higher cap.
Adam is 100% right how many non tax states have been in Cup Finals or have won it in the last 5 years, and do you honestly think all things being equal Kucherov signs for 9.5 mil in Canada or even California, not a chance
I think I see what Jesse is trying to say, but his argument is flawed in 3 key ways: 1. Jesse seems to be conflating "complex" calculations" with "mathematically impossible" calculations. If you hire a good accounting team and a good coder, they can bang out an algorithm to make these adjustments (with real-time updates) in a couple months tops. There's nothing impossible about it, if the will to get it done exists. 2. Jesse is saying a player's lifestyle affects their take-home salary, and that's just fundamentally misunderstanding what take-home salary is. If player A and player B make the same amount of money after taxes and player A buys a house that costs $10,000,000 more than player B's house, player A can't turn around and say that he made $10,000,000 less than player B. They just spent their money differently, which isn't their employer’s problem. Plus, as Jesse said, the money gets taxed to where you played the game, not where you live. So the playing in New York but living in PA example is irrelevant to the income tax conversation. 3. Jesse says that since Walsh said that you can "be smart" about your money to mitigate the issue, that means there is no issue. However, John Tavares is in federal court for trying to "be smart" about his money and free agent trends for as long as the cap has existed have shown that a significant percentage of players will prioritize lower income tax markets. Why is that? Because you have to pay people to "be smart" with your money for you, and now with the JT situation you have to worry about the feds coming for you anyways. So it's much easier and cheaper to just go where the taxes are low to begin with.
pretty sure the mighty NFL tried this and failed, Bill Belichick said it himself last week '' signing players to play in Massachusetts was a pain because of the state income tax'' . An even easier solution would be the luxury tax like MLB has.
Governments would hate this, but you could do your payroll through the NHL which can be headquartered in New York, or Florida, or Texas, or California... Etc. that way every player is subject to that states tax rate.
Governments wouldn't care, they are getting the taxes they set! the league would be the adjusters... example. if the cap is 88 million the teams that pay more taxes would get a higher cap value... let's say 92 Million. the teams with less taxes spent would end up with a lower cap, let's say 82 million... players still all get paid the same. it's the same hard cap, even though it appears different. it's equity over equality before you complain... the 92 million after taxes is 82 million at the end of the calculation... so the 88 million hard cap equates to 82 million after taxes. obviously made up numbers to make the point. EVERY TEAM ends up with the same ending number, every player gets the same salaries... comparable, obv som players get higher salaries. an ELC will not equal leon's salary for example, but they will all end up with the same amount of money as other players at the same salary level
@@IceNinja2007make it Florida then any politician suggests a state income tax commits career suicide or Nevada which actually bans a state income in its state constitution.
@@IceNinja2007 That they can't target an industry, so they'd need to go after every person at that income level...and that is where literally all of the finance companies are headquartered?
So, when a team like Toronto brings in the CEO of Canadian tire to explain the vast endorsement possibilities associated with playing for them(like the leafs did with Stamkos in 16 and I'm sure other times as well) is that going to be figured in too? Otherwise you're punishing a team for having great weather and laws.
Financial parity in North American sports, which doesn't exist anywhere else in the world, is a form of 'socialism' not free market fair play. The salary cap in the NHL was implemented to prevent certain markets, and let's be honest the NHL had the Toronto Maple Leafs and NY Rangers in mind here, from building teams with as much money as they could throw at a roster that other teams simply don't have. They won't change anything regarding tax disadvantages for that very same reason, because parity isn't really their goal and never was, its all about stopping teams like the Leafs, Canadiens and the Rangers from spoiling the league's plans for growing the game because they can spend as much as they want if the salary cap was lifted tomorrow
Canadian teams get 10% more cap and high tax States get between 2 & 10% reflective of tax rate. Or Florida and Texas get 10% less. Not perfect but more balanced than currently done.
There are reasons why the income tax is different in different places. It is because you get different things paid by the government and therefore it is impossible to make the salary cap be based on net income. You should not keep rumbling about this thing without a deeper knowledge of how taxation and publicly funded systems work. Jesse is 100% correct, there is no universal fix on this as long as we have a hard cap.
This isn't on the players. Why wouldn't they want to play where they can get the most bang for their buck? That makes sense. What doesn't make sense is the NHL's refusal to even the playing field. Simple fix. Peg Cap to the State/Province/Country marginal tax rates. Those rates are known and easily quantifiable. Pro Rate the cap according to the tax rate. Highest tax rate area gets full access to the cap. Lower tax rate areas cap is reduced accordingly. Ex. Cap is 100K Team A has a marginal tax rate of 40%, Cap avail 100K Team B has a marginal tax rate of 10%, Cap avail 70K
This was literally not a problem when the cap was lower lol….. Jesus I’m not even a Canadian hockey market fan but even I can see that. When it was 41 million vs 90 million and taxes have flown through the roof in Canada it’s not hard to see, you still need to start a culture form a family, I’m not saying this works but it’s easy to lure players when they aren’t going to lose nearly half there money like they will in Canada lol
Jesse is clueless here. Cap should be based on after-tax dollars. No perfect, but better.
Cap is also an artificial number. Jesse definitely has to take an L here.
I'm not sure why he's so confusem
No the players just have to pay taxes ... if you don't wanna pay 52% then don't play for that city not the players fault people vote dumb
@@justinrogers1807 Let's not pretend that politics have anything to do with taxes on that level. Once you get to the high 6, 7, 8 figures in a year, you're going to pay more in taxes (as you should, in my opinion, it's not like they'll miss it all that much). States like Florida can get away with low to no income tax due to a variety of factors. Florida specifically has bustling tourism more or less all year round thanks in no small part to their theme parks and beaches, plus as a cruise depot it's close to the Keys, Bahamas, Mexico, etc.
That's silly. Vote in someone that will lower your taxes.
When I was in the military here in Canada, they had a cost of living adjustment that was dependant on where you lived. You would get more money every month if you lived in Toronto vs in Saskatchewan. It wouldn't be too hard for the NHL to figure that out.
Doctors get paid a bonus for working in smaller communities as well. Not as much as they should. But they do.
PLD was great
@@gorlock691 right but that doesn’t address the effective cap space disadvantage and that is what the discussion is based around.
I live in Sask...I could use some money
@@Crankbait81 Probably way more affordable than Vancouver BC.
Florida has been a no-tax state forever, even when the Panthers were horrible. It was not long ago where Florida was where careers go to die.
Taxes only became a problem when Canadian teams ran out of other excuses. NHL feeding them top 5 draft picks for years wasn't good enough.
In Canada the income tax system has "equalization" payments between provinces who are net contributors to provinces who are net recipients essentially administered by the federal government. As you can imagine the recipients think it is fair and the contributors think it is not. I can't imagine the NHL would even attempt to try to create some sort of program similar to that at the league level.
Just set the salary cap at “take home” pay based on where their arena is. Yes playing in other cities will be different taxes per game, but leave that to the accountants. Everybody’s take home should be the same no matter what market they’re in. No team would be paying the same payroll tax to their respective government, because every state/province have different payroll tax, but the players “take home” pay should be the same no matter where they’re playing. That’s the only way you can actually make a fair salary cap. It’s either that, or remove the cap again because it’s obviously more advantageous to low payroll tax places.
Yes, Toronto would pay more to their government in pay roll taxes than Tampa, but that’s just the cost of having an NHL team in a high tax market. You have to remember, these NHL teams make an absurd amount of money. Toronto had no problem with paying high salaries and high taxes before the salary cap era, and I’m sure they wouldn’t mind paying more payroll tax to the government if it means the league would be fairer in terms of signing players.
Like they said, leave the numbers to the accountants.
Edit:
I thought this "pay different taxes at away games" was incorrect because it sounded so ludicrous (I myself deal with weird tax things, because I'm an American working for an American company, but at an overseas office in a country where I have residency due to said work, and my work routinely includes travel to other countries or states a few times per year). This is an asinine policy that makes absolutely zero sense and goes against what nearly every other cross-state or travelling employee has to do in almost any other industry. (Note: it only applies to a handful of cities, so not every away game gets a "jock tax").
@@jsquared1013 nice! That actually would make it easier for the accountants to make a “take home” salary cap much easier. I was basing that info from the video. Thanks for the fact check!
In the state of Florida, Sam Reinhart will pay just over $3 million a year in taxes. He would pay an extra $1.4 million in New York, $1.3 million in Toronto and $1.1 million in California.
Over the course of his eight-year deal, he would save more than $10 million by playing for the Panthers instead of the Maple Leafs.
How is that fair?
It is completely fair. They live in a place with higher taxes. If they wanna save money. Fight the state government or principality or whatever they do in Canada. Its not the NHLs problem. It's the players problem. Make a difference where you are. You wanna pay less taxes fight the system where you are. The reason it sucks is because there aren't enough people that are fighting for lesser taxes t I begin with in these areas.
@@aarons6907”fight the system” LOL you ever ran in a circle for your entire life?
It's fair because part of paying taxes go to quality of life.
Sam's wife and children have to pay for medical expenses, while in Canada, they would not.
Also the math you suggest is very simple while the reality for all players is much more complicated.
@@stevethomas8700 You don’t think health care is covered for an NHL employee?
@@stevethomas8700no they’re supposed to but they don’t actually
This is a simple fix, allow teams with higher taxes to spend over the cap the same percentage they pay more in taxes compared to the leagues lowest.
Done.
Cost of living is irrelevant, like it costs a lot less to live in MTL then so and so … for an average citizen, lots of players became bankrupt here despite the low cost of living because it’s nearly irrelevant to their lifestyle as a stat. A millionnaire athlete will have similar expenditures no matter where he plays.
So, essentially, you're advocating for a tax system that discriminates in favor of hockey players who happen to play in Canada, but not, say, Utah.
Are you also advocating for a tax system that creates a specific category of privilege between Canadian-signed players and other run-of-the-mill Canadians? If we create a special grant of government that favors a specific category of workers over others, isn't that unfair, if not illegal?
Canadian teams don't win Stanley Cups because the tax system in America favors the player; they don't win Stanley Cups because they put together shi*ty teams and drastically overpay a few players based on star power (see: "Core Four", Draisaitl and McDavid) and, therefore, can't afford the support and role players they need.
I'm a native New Yorker who currently lives in Raleigh, NC. The "cost of living": argument is bullcrap when you stop to consider that housing, food, utilities, etc, are just as expensive in Raleigh as they are in New York; the difference is in the state and local tax rates.
I'm not an expert on Canadian taxes, but I'm guessing the same is relatively true there, especially in enclaves full of spend-everyone-else's-money liberals (see: Ontario). Perhaps if teams can't affords the marquee players, they should go about building their teams differently in the financial sense(see: any team ever GM'ed by Lou Lamoriello, not named Toronto who have cash flying out of their orifices but decided to put the franchise in the hands of a guy who learned his craft playing NHL2014 in GM mode, anyway ). Lou would not have put 50% of his cap into four players for the next decade so that he couldn't afford quality defense and goaltending.
That's probably why they fired him in Toronto. Wanting to make a splash was more important than building a winner that could be financially supported. Perhaps if more teams in Canada took a more-holistic approach to team building, rather than throwing money at a few players, they'd be more successful?
But, hey, Canada, keep trying to find excuses for the Cup drought. I enjoy them immensely.
I agree with most of what you're saying, but the line "housing, food, utilities, etc, are just as expensive in Raleigh as they are in New York" is _LAUGHABLE_ . I lived in Raleigh for four years, spent all of my youth and a good chunk of my adult life elsewhere in NC, and most of my extended family (aunts/uncles/cousins) have lived in Long Island for decades. Rent for a small apartment in NYC costs double or more what a mortgage for a moderately-sized multi-bedroom house costs in most parts of Raleigh. Gas is less expensive, utilities are less expensive. Unless you're comparing to somewhere upstate vs tech-exectuive parts of Cary or some such, it's not even close. But then again when most people think "New York hockey" they are probably going to say NYR or Islanders before they say Sabres, so I stand by my use of NYC as the comparison.
@@jsquared1013 P.S I just paid 40 bucks for a ribeye and some cut watermelon this afternoon. Raleigh is not cheap, especially when the supermarket workers all get $20 an hour.
The players choose where they play. It’s a Canadian tax code issue not an NHL issue.
This is dumb. Because the taxes in california are also different from texas, and the taxes in michigan are different than new york. this would be impossible. Its nearly a non issue. Not the NHL's problem to solve. We could argue advantages outside of cap all day. Should michigan be able to spend more because the weather is better in florida? its basically the same argument. Of course a certain amount of people would prefer one over the other. At that rate just remove the cap again completely and if your market thrives it thrives if it falls it falls. And on that, last i checked detroit has the 2nd richest owner in sports, and he doesnt live in florida, was it unfair when there was no cap and detroit was dominant for nearly 30 years? NOBODY thought that.
Guys forgetting how much property tax and sales tax are in those states
Those two are both somewhat controlled by the individual, because they depend on what the individual chooses to buy.
@@jsquared1013 sure but you can’t expect to balance anything on income tax and refuse to take into account something else. Further, I think the lowest rate in Canada is higher than our highest. So it really sounds like a skill issue
Should it also be adjusted for endorsements? Tavares makes far more in endorsements than Barkov despite Barkov being a much better player. He makes more because he plays in a big hockey market
They completely miss the boat regarding where games are played here. Taxes are all paid in the State of residence:
"State tax reciprocity means you can live in one state and work in another without being taxed in your work state. Instead, you only pay taxes to the state you live in. If no relevant state tax reciprocity agreement exists between your residence state and work state, you may need to file taxes in both."
All States will either have a reciprocity, meaning the resident needs to only file in the resident state, OR they will give a credit for taxes paid elsewhere, so the net tax rate never changes from the home state.
Except jock taxes are a real thing so this does not apply to professional athletes.
The jock tax exist…
@@alanpaul9481 no stupid each player files a state income tax in Massachusetts,NY, NJ, Pennsylvania, Ohio, Michigan, Maryland, North Carolina, Illinois, Missouri, Minnesota Colorado, Utah/AZ, California
Lets teams go over the cap at the same percent of their state/provincial income tax.
This is by far the simplest and most clear solution. Whatever percentage difference teams have to pay more in taxes would be added onto the cap. Therefore, if I wanna overpay $1 million to a player to make him get 10 million here instead of 9 million there, it doesn’t crush me against the cap
@@louismcintyre4725 are you going to punish the teams that have way more lucrative endorsement possibilities like Toronto as you are the tax less ones like you propose to do to TB, Nashville etc .? You can't fairly attack one or 6 teams advantage and not attack teams like Toronto and Detroit and Montreal who have other financial advantages for players.
@@louismcintyre4725 The simplest and clearest solution is to recognize that taxes are outside of the NHL's purview.
@@danmac9336NHL is not responsible for endorsements outside of the league. You're also paid in endorsements based on how good you are not everybody gets them. Last I checked Stamkos, Crosby, McDavid and Mackinnon are in commercials the most. What do all these players have in common?
That’s what I was thinking too
When Stamkos signed in Tampa the last time he was a free agent he signed a friendly deal because there was no state tax. For The Leafs to have gotten him they would have had to pay $11-12 million to equal what he got in Tampa. Taxes matter based on the deals players get.
The NHL is the only league even remotely talking about this , admittedly because they're the only league with numerous Canadian teams. The NBA and MLB aren't talking about it. "But they don't have a hard cap like the NHL!" Fair point. The NFL has an equally hard cap, and there is no talk of equaling the difference between playing in New York or California vs Florida.
NFL is also rolling in money and the cap is WAY higher, so "role players" get compensated more, and are arguably less critical to championship contention due to the differences in field time / ice time for "below superstar" players in each sport.
Massachusetts has an additional tax on millionaires. It’s not just Canada problem.
People say that players have the choice of where they want to play. In reality there's only a handful of players that actually have a choice of where they play. Most free agents have 2 to 3 options unless they want to get underpaid
The bottom line here is SDPN is trying to find a way to allow the Leafs to sign more players because they are always up against the cap due to their ongoing mismanagement.
If the situation was in the Leafs favor, there would be no discussion.
Not only would there be discussion, something would've already been done by now. League has historically been okay with a lot of things so long as the Leafs are victims as opposed to benefactors.
@@pauls6318 wahhhhhh eveyo is out to get the Leafs do Toronto fan know how to do anything other than cry like 2 year olds?
Lol this segment showed that not everyone/adults understand how taxes work. 🤡😂
Jessy is so dumb I thought he was the smart one here 😂😂😂😂😂
Maybe no one should be taxed at 50+ percent. Other than that tax codes have consequences. People everyday to tax advantage areas. California’s move to Nevada and Texas. There’s no way to fix its. Everything isn’t fair. How can Ottawa afford to pay even more for players? Stop taxing people to fn death.
Adam thinking this is simple is the biggest indicator he knows very little about tax. It would be insanely complicated to do fairly.
It’s not on the NHL to equalise tax rates.
Lots of markets have different advantages. Endorsement deal potential, history, original 6, fan base, weather, tax rates, team strength, where a player is from. Quit crying about it, use the advantages you have and get on with it.
Exactly every sport deals with this. Athletes have do the same everywhere. Also how much are you taxed on 10m in Toronto as opposed NYC or LA. Adam thinks the nhl is larger than the IRS?
Especially since athletes pay taxes in the states they play games not just where they live
Best comment here. Whenever Adam talks at length, I have the sudden urge to turn off my phone.
EDIT: Maybe too harsh what I said, but the whole time Adam was speaking I was like "there's no way it's as simple as you're making it"
Oh too true. If it was a simple fix... a major sports league would have already done it. Some problems even are greater... as some states/municipalities have other taxes that are NON-Income related that effect pro-sports players. If it was an easy thing, someone would do it. An how to do it fairly.. good luck with that. On top of that. How many players don't live where they play? For MLB players, how many make their home in the dominican Republic where their incomes probable make up half the countries GNP. I bet most teams realize it can be an issue, but also know it's next to impossible to solve.. The easy fix.. move all teams out of Canada because theirs is beyond rediculous.. oh that would go over well. How many players still make their home in canada but play in the US? Again, impossible to solve and give up... it's not the teams complaining so much as the fan bases.. who really have not clue as to how much of a difference it really is.
@@ericcus2487in Toronto you would pay $5,320,356 for exactly 10m in revenue while in la you would pay $5,236,686. The thing that you don't understand is that this video isn't advocating for just Canadian teams to get a increased cap, but for a cap to be based on your state/province's taxes rate. Californian teams would benefit almost as much as a Ontario team would, and probably slightly more than an alberta team (Alberta has a low provincial income tax). The idea is to make it more balanced players aren't just only going to Florida and other low tax states because so they can actually make what they are worth after tax. To put it in perspective, you would need to be paid 17.2 million annually in Toronto to make over 8 million after taxes, I don't need to tell you thats absurd. It gives an advantage to other teams that could be avoided. Heck if you wanted I could make a spreadsheet in like 15 minutes that would detail how each state or province that has an nhl team would have a different cap and what it would be, its not that hard.
Eric Duhatschek put out an article on The Athletic about a month talking about this is less of a problem than it seems.
These tax advantages have always been in place, yet only the fiur of the last five champions (TB, TB, VGK, FLA) are teams from no-tax states to win the Cup. (And people like to put * on both of TB's wins, even if they're both legitimate championships.)
TB and FLA were terrible in the late 2000s/early 2010s, and nobody talked about taxes then.
Nobody credis TB for drafting their core role-players (or how their salary cap hell has now bitten them hard by having to let Stamkos go), or FLA for trading for and signing their contributors and grit, or VGK for capitalizing big time in the expansion draft and then making bold decisions thereafter.
Not to mention, there's only a certain amount of contracts any team can sign. It's not like every free agent wants to go there.
I think the LTIR is a bigger issue than the taxes.
I say the simple solution is to just get rid of income tax everywhere
I'm with Adam on this. If you're getting paid in the State you work in for 41 Home games, you're going to pick the state with the lowest Taxes, if you can help it. It's the Home games that should be the focus. Not the away games.
Edit:
I thought this "pay different taxes at away games" was incorrect because it sounded so ludicrous (I myself deal with weird tax things, because I'm an American working for an American company, but at an overseas office in a country where I have residency due to said work, and my work routinely includes travel to other countries or states a few times per year). This is an asinine policy that makes absolutely zero sense and goes against what nearly every other cross-state or travelling employee has to do in almost any other industry. (Note: it only applies to a handful of cities, so not every away game gets a "jock tax").
Whelp...
We've run out of topics and have shifted to the cross national tax code problems.
That means pre-season must be close
Ah yes because southern teams have always dominated free agency and the trade market. I mean look at the Florida Panthers from 2000-2020, they always got elite players because of the taxes
Gary Roberts and Joe Nieuendyk: "Am I a joke to you?"
Ahhh. The time we signed massive free agent Dave Bolland.
@@GreekInThe6ix That was right after the lockout, and it has been said several times that they were retirement deals, as well as other deals.
That is all Florida was looked at as back then. There was no urgency to win.
Tell the Canadian provinces to cut there taxes
... but, but, but... the NHL cap limit is not a limit on "lifestyle" or "community". It's a limit on salary. The NHL *loves* to create loopholes for itself. Thanks for bringing up the topic of how the NHL bleeds Canadian markets, guys.
The calculation doesn't have to be perfect, it could just help balance things out.
The Canadian Federal and Provincial Governments bleeds NHL teams and players with their idiotic tax policies. Same goes with states like California, New York, Washington, et al.
Sounds to me like Canada bleeds Canadian markets.
its a problem. Florida and Las vegas and Dallas will always have strong teams because of this unfair advantage
How about if you play for a Toronto team you get more sponsorship dollars than in I dont know Arizona? It would be ridiculous for the NHL to account for that when it comes to cap. Why would the NHL take care of one money variable and not the other 100....
Matthew Tchachuk had the most sponsorship deals last season
You think the whole Leafs squad has sponsorship deals? Maybe 2 or 3 players at most
Canada already has tax breaks in place for people based on where they live and work (Northern Living Allowance) … so some type of balancing system for people based on where they live and play in the NHL is definitely possible
Will pay have to be adjusted for when the Can dollar goes up & down compared to USA too? Can vary by 20-30% easily.
I think the simplest solution would be to put the cap on take-home pay (after tax) and then compensate the owners on the other end by making HRR an after tax value as well. In theory that should mostly come out in the wash but level the real dollars playing field more.
This entire concept of income tax fairness vs unfairness is ridiculous.
So many years teams in low tax areas do poorly and no one wants to sign there. Recently florida teams have stable and competent ownership and management and this is a hot button item.
No one complained when the Coyotes were playing in a 5000 seat arena. :D
But players went to Tampa because of the tax break and were willing to sign for less. Many players say it that they'll take less to play for a team where there are less taxes.
@@DBeau73 and the nice year-round weather for their families, numerous entertainment options (restaurants, theme parks for the kids, concert venues, etc), and a host of other factors.
@@jsquared1013 Yeah, call hurricanes nice year round weather! It feels like you are trying to compare Buffalo to Florida here when you talk about restaurants and concert venues. You forgot to add mass shootings in there. And the way that the Republican's are going, they seem to be at war with Disney, so the theme park is about to go.
It is a blanket. All of these players get into the highest income bracket within their particular areas. You can easily calculate the total taxes paid at each lower level within each state - ie its going to be 23 (players) times each of the lower brackets, then the highest bracket times the remaining difference between the lower rates and the aggregate cap. That gives each team its own cap which would be the equitable cap throughout the league, while ALSO incentivizing teams to spend to the cap. Since it only adjusts pay UP, the players won't complain.
Adam is on another planet. What he is proposing is allowing teams to overspend over the cap, meaning giving players more than 50% of HRR. Name the owner (not the GM) that wants to increase the amount of money going to players? Even MLSE is quite happy to have a cap on salaries.
It doesn't have to be an increase to the cap in high tax jurisdictions, it can be a lowering of the cap in low tax jursidictions, Of course, then the PHA would be pissed. Most likely, it would be a mix of both so that the average cap remains the same and some team caps go up and some go down.
New York has a very high state income tax. Teams in tax free states have a huge advantage when it comes to signing free agents and retaining players. Nashville signed three huge free agents this summer in Steven Stamkos, Jonathan Marchessault, and Brady Skjei. So many players want to play in Las Vegas now because Nevada has no state income tax.
These no tax states also have great weather year round. I'm sure that's a huge factor.
You do realize that rangers best defenseman and highest point scorer are both free agents signings right? Also Vesey and some others. Ny has always been a hot landing spot for free agents. Usually some no name players like Jagr, Gretzky and Graves though. Islanders tend to do okay in free agency and buffalo absolutely sucks in that category. Although this year they signed Lafferty, Zucker, Aube-Kubel, Reimer and some others for pretty reasonable deals. I don't know state of New York seems to be pretty mixed bag when it comes to free agents but at least rangers is one of the hottest spot for them in the entire league.
Here is my suggestion for how to do this very simply.
I suggest that every player in the NHL get a net pay of 50% of their gross. If his gross is $10M, he will get $5M. If his actual net is really $7M, then the $2M difference gets paid back to the NHL and goes into a pool. At the end of the year, the pool is divided evenly between all the teams and added to the team's salary cap. So, if the pool has $64M in it, each team gets a cheque for $2M and the cap is increased by this amount.
Simple. Fair. Players know exactly where they stand.
All contracts should be tax true out adjusted thus they would have the same take home pay no matter the location. I do this with our payroll nationwide. Also means people get “raises” when tax goes up but that number should not matter to the salary cap.
Should cold markets get a higher cap too?
The NHL should have equalization payments for teams in high tax markets. e.g. If a team pays $US 88 million for salaries in Florida, versus $US 88 million in Ontario, then the Ontario teams should get a top-up funded by the league to account for the higher income taxes in Ontario. Suppose it is 10%. Then a team will distribute that extra cash to its players in proportion to their percent of the salary cap.
If a player is traded from an Ontario team to a Florida team, they would lose the top-up. If a player is traded from a Florida team to an Ontario team, then they would gain the top-up. Either way, there should be no net change in monetary compensation (in a perfect world), or much less net change in monetary compensation (in an imperfect world).
Appreciate the detailed breakdown! I have a quick question: I have a SafePal wallet with USDT, and I have the seed phrase. (air carpet target dish off jeans toilet sweet piano spoil fruit essay). How can I transfer them to Binance?
Simple solution....cities that pay more taxes have more cap. Just to make it fair.
Simple fix is to adjust the cap and give teams x percent more space to pay for the players taxes. That way teams with no income tax get the usual $85M cap and other teams would get like a small percentage boost to offset the tax advantage
It's a lot more simple than what they're making it out to be.
There are NHL states that have zero income tax, therefore 0% is the starting point.
Beyond that, the teams have a sliding scale of cap adjustment based on their state/provincial income tax.
They can make it as simple as whatever the tax percentage is for income over $1M/year is the percentage you increase that team's salary cap.
It's not as if the salary cap is government issued. The NHL and NHLPA decide/negotiate the number. They can implement this system without issue.
When player A decides to sign with Dallas for $9M aav because they will make more than they would signing in Montreal for $11M aav, the salary cap system is broken and some teams are at a huge advantage. Which defeats the purpose of a salary cap (to create parity).
The best way that everything is fair is to have the owners pay the player's taxes that way, it will make it more about negotiating with players and less about which place is better for me. If an owner wants to bring in a player without overspending, the cap, then they must pay their taxes.
I think the solution is bias towards undercompensating rather than overcompensating. The last thing you want is a high tax team getting a literal advantage. Use the no-tax states as the baseline. If Montreal is almost 18% higher than those teams, then give Montreal something like a 6% overage. It moves in the direction of parity without creating chaos.
Adam is correct. Simple this does not need to affect salaries. Salary cap per team is calculated the same as now. However percentage advantage which can easily be figured out for low tax states is added to teams overall Cap. This is the major reason a Canadian team has not won the cup since 1993. Please tell me the mathematical odds of a Canadian team not winning cup 36 years.
This is an incredibly complicated issue. I’ve given it a lot of thought over the years.
How about implementing contracts with a net salary for the players and have a CAP also based on NET?
It would make a huge headache for the teams and accountants which is why they would be against it (just thinking of a player being traded mid season is giving me a headache tbh), but I honestly don’t see any other simple way to make things equal from the player’s take home pay point of view, ignoring all other aspects.
Players might use the next CBA to argue for this, but I don’t think it’s going to work out.
There has to be a scale when it comes to the cap. The problem is with those teams hurt by higher taxes, you can’t stop those GM’s from being irresponsible with that extra room, overpaying, and driving the contracts up.
Increasing the cap for high tax areas only helps if those high tax areas have enough income to spend more. For teams that already struggle to spend to the cap that in fact means they'll have to no longer be as close to the ceiling and they'll drift closer to the floor. Rather than a cap increase what would make more sense would be a cap penalty to teams with an advantage but the NHLPA would of course never go for that because it'd mean less pay for the players in those markets. Which is why doing this can't work. Most of the Canadian teams couldn't afford to have to pay players 20% more forget about potentially even higher. Most of the high tax U.S. teams couldn't bare the burden either. For every New York that can afford it you have a New Jersey or District of Columbia who can't.
They could have tiers for cap relief for high tax areas. Scale of 0-5. 0 is tax free states and 5 would be the highest. Each tier gets an assigned percentage of cap relief to balance things a bit
In Texas we don’t pay income tax, but pay higher sales and property taxes. High enough that we don’t need income taxes. How do you account for that?
“If you sign in New York you know it cost more to live there” the same exact thing could be said for income tax
The only way I see this working is if the organizations pay the tax for the players. The cap would need to be adjusted to fix this, could get messy with different tax breaks (such as a player donating to charity) and it still creates a disadvantage for teams located in higher tax regions but it at least takes that consideration out of the players options when choosing where to play.
The problem is once you start looking at individual team's income tax information, why are we not also looking at other aspects of the states a player who plays in Toronto May pay more income tax, but they're also much more likely to get a contract with some other company for ads.
You can't control for every variable, so the only fair way to do it is simply to keep the way it is now and teams will have to just play on their merits
Because Canadian teams pay players in U.S. funds. You take the exchange rate and give the Canadian teams a higher cap.
One more item - true parity means whole spend is equal, not just players. The Leafs and habs advantages would go away with not being able to spend more on triple coaches and scouts.
Just allow a salary adjustment on the cap so teams can pay a bit more for a player but have adjusted percentage not count against the cap or allow the league to compensate teams that have to adjust.
Do we also factor in how much each team is able to spend on support staff? Analytics departments? Potential for endorsements? Sports science divisions? Other perks?
Simply adjust every team max cap space so they're equivalent to the lowest taxed State or city where a NHL team is located. I don't understand how this would so complicated
So the big market and Canadian teams get to overspend even more because they can't compete because of tax laws?
How about no.
@@gregbrown3764 This would apply to any team. I never said this would only apply to Canadian teams. It's very simple really.
@@elomellow1623 Tell me you didn't actually read my comment, without telling me you didn't...
@@gregbrown3764 I really doesn't matter, Greg. Don't be so upset. Most of us just want the game to be fair. You don't. It's your point of view.
@@elomellow1623 I'm not upset at all. I'm just amused by the mental gymnastics people use to justify cap circumvention.
Although to be fair, if those rules were written in, it wouldn't then be circumvention.
I'm just curious what part is unfair?
If a player signs in say, TOR or NYR, they made a career decision based on as many factors they could think of; taxes are just one of those factors, albeit a large one.
Not mentioned is what happens to players who live outside NA during the offseason? They pay a different tax rate for their countries plus have an adjusted tax rate for what they make in NA depending on where they play. There isn't an easy solution as there are too many hands in the pot.
After income tax cap in Florida = $55,500,000 usd. After income tax cap in Quebec $41,125,000 usd.
Did you figure the state income tax Bennett or any other Florida, Tennessee,Texas, Nevada, or Washington State player pays on US road games? That will reduce the difference because they are required by US law to pay NY state income tax on games played in Buffalo, NYR, NYI,. NJ State income tax to games played at the rock California taxes on games played in ANA, LA, SJ ETC....
That sounds like a problem with Quebec and not Florida...
@@philipcoggins9512 Provincial governments supply healthcare to their citizens.
It costs $12,000 usd, or $16,250 cad to have a baby in Florida.
@@danmac9336 NHL players generally play the same amount of games in higher and lower tax Provinces and States. The location of the team they play for dictates their income most.
I would think to do contracts by "net" pay, not "gross" pay. Keep the taxes as they are and etc, but only count the salary cap by the player's net pay after taxes on paper.
When the lists of ten teams players don't want to play for are equally distributed between all 32 teams then there will be an equal plying field for all teams.
Maybe vote for politicians who would lower your taxes
Or raise Canadian teams salary cap ceiling.
@SDPN if a player can take home an extra 1.4 Million per year on $10M AAV in one market vs another that's an extra $10M over 7 years which makes good players always choose those markets to play in.
To assist in this the NHL would need to calculate at the beginning of the season the gap per martlet and allow an adjusted cap for each team vs the market either the advantage.
Example: Florida has a 90M cap in 2026 ---
Montreal 15% tax disadvantage - Montreal Adjusted new cap: 103.5M
NY 10% tax disadvantage - adjusted new cap: 99M
And so on.
If tax is an issue Make the cap apply to NET not Gross income. Pay after tax Not pre tax.
Jesse- your point is to money management; Also, I was unaware that players file a return for each city they play in. Bt the point is not for the players to have parity but for the teams to have parity on the cap. S o the adjustments needs to be applied to the teams not the player. So the teams like in Floridia will have less cap to work with because the players are more likely to go there for tax reasons So hypothetically Fla has a zero-income tax for its residence so a player can live there more comfortably. Conversely NY has a 4-10.9 % income tax all nhl player would be at the 10.9 so NY teames (Islanders, aRngers and Buffalo) would have !0.9% higher cap this is a sweeping generality. A bean counter would need to come up with the exact numbers. That is the crux of the issue that GM's see a disadvantage to their teams. This in my opinion can be addressed by a soft cap Bettman being an NBA man will probably go this direction. With the tax advantage being the overage adjustment. So in the previous senario the NY teams would have an 10.9% overage in simple terms This will probably be addressed with LTIR cap rules as one item. to level the playing field.
From what I understand, in Canada, the tax you pay is based off of the province in which you work, not where you live.
I work in Ontario and live in Quebec and I pay Quebec taxes. The company has to adjust it or else I'd have to pay extra to the IRCC. I figure it's the same for NHL players.
Interesting. I live in Ontario and worked in Quebec and had to pay Quebec taxes.
@@Kain292 You probably got some money back after you did your taxes since the tax rate is higher in Quebec.
in the states you pay tax to the state you live in not where you work. so if I live in Indiana and work in Ohio I would have to pay Indiana state income.
True parity would ensure that every single player on the exact same salary takes home the same amount.
Sure cost of living is higher in say New York over Nashville but at least the player in New York will have the more expensive home that can be sold of they more to Nashville.
So, now that couple south teams have won in past 5 years, suddenly the tax thing is an issue? How has south not dominated the whole cap era with their unfair advantages? Or is it just about the Great Canadian Drought?
I think its simply change of culture now in the NHL. Players are realizing this stuff and are more aware now than 10-20 years etc ago. Do I understand some players want to play in Florida with year round summer instead of a cold climate Canadian team? Sure. But Also saving millions of dollars throughout your career is Also nice and would purposely choose those teams over other desirable locations. I'm glad this is being looked at.
@@LEGOBrandoso is the NHL going to reduce teams like Montreal and Toronto where endorsement availability exists.
Vegas and Nashville also went to/won finals, and both are in reduced tax states. It's a trend the NHL is looking into.
@@LEGOBrandoOh brother. Another stupid comment. First off once the southern teams start losing hockey will lose it's luster. Hockey is just a novelty in Florida and North Carolina. We here in Buffalo have not even sniffed the playoffs in 13 years yet we still are a hockey town.
@captainahab4325 The issue isn't how much of a "hockey town" the low-tax cities are, or how well they are supported by the locals when they don't win. The issue is that these cities currently have a massive advantage to keep themselves from becoming a team that doesn't win, or to rebuild quickly if that happens. That advantage is the fact that everyone knows they don't have to pay as much to get players to sign with them as other teams would have to pay for the exact same players. This means you can afford to pay less for the foundational players, which leaves more to fill out the roster with better supporting players (who ALSO will take less) than teams in high-tax cities can afford.
The Cap in US dollars Covert to Canadian dollars
That convert into Canadian
Is now the American dollar value for Canadian Teams
Then the cap will be different for Canadian teams and American teams
The extra money to Canadian teams can equal out the playing field a bit.
I think you guys are looking at this wrong. You allow the teams in high tax areas to exceed the cap by flat percentage. Example in Montreal, where the tax rates are higher, they could have a cap that’s 10% higher than the league average. Maybe in Toronto is 5%. That way the teams are allowed to spend more and could pay players more comparatively.
TL:DR Provinces that decide to get by on income taxes annoyed that other jurisdictions can thrive without them.
I don’t think there can be a financial parity solution in the NHl. You are not just arguing country taxes, or state taxes, but also city and county taxes as well as geographic impacts. The NHL shouldn’t be responsible for all of this! Every month those taxes are changing for someone and how can you expect them to manage all of that? That’s just crazy and the pressure should be on those “districts” legislating taxation rather than the NHL.
The salary cap should be based on team home location as a percentage of the salary cap.
The purpose of the cap isn't parity. It's to provide cost certainty to the owners. That's why I don't see the NHL (aka the owners) being in any rush to implement something like this. And if they didn't, it would end up with the players in Florida getting a lower cap, not Toronto getting a higher cap.
How to you compensate for the loss of Civil Liberty in Canada? I would prefer to live in a free state.
Salary cap should be pro rated according to local tax due to “no-tax” states
Adam is 100% right how many non tax states have been in Cup Finals or have won it in the last 5 years, and do you honestly think all things being equal Kucherov signs for 9.5 mil in Canada or even California, not a chance
The adjustment needs to be to the cap and not individual salaries.
The league should have players fill out how much they paid in taxes into an annual survey and then each team gets a current cap credit.
What are Bob Ogden's thoughts on this?
I think I see what Jesse is trying to say, but his argument is flawed in 3 key ways:
1. Jesse seems to be conflating "complex" calculations" with "mathematically impossible" calculations. If you hire a good accounting team and a good coder, they can bang out an algorithm to make these adjustments (with real-time updates) in a couple months tops. There's nothing impossible about it, if the will to get it done exists.
2. Jesse is saying a player's lifestyle affects their take-home salary, and that's just fundamentally misunderstanding what take-home salary is. If player A and player B make the same amount of money after taxes and player A buys a house that costs $10,000,000 more than player B's house, player A can't turn around and say that he made $10,000,000 less than player B. They just spent their money differently, which isn't their employer’s problem. Plus, as Jesse said, the money gets taxed to where you played the game, not where you live. So the playing in New York but living in PA example is irrelevant to the income tax conversation.
3. Jesse says that since Walsh said that you can "be smart" about your money to mitigate the issue, that means there is no issue. However, John Tavares is in federal court for trying to "be smart" about his money and free agent trends for as long as the cap has existed have shown that a significant percentage of players will prioritize lower income tax markets. Why is that? Because you have to pay people to "be smart" with your money for you, and now with the JT situation you have to worry about the feds coming for you anyways. So it's much easier and cheaper to just go where the taxes are low to begin with.
pretty sure the mighty NFL tried this and failed, Bill Belichick said it himself last week '' signing players to play in Massachusetts was a pain because of the state income tax'' . An even easier solution would be the luxury tax like MLB has.
Governments would hate this, but you could do your payroll through the NHL which can be headquartered in New York, or Florida, or Texas, or California... Etc. that way every player is subject to that states tax rate.
Governments wouldn't care, they are getting the taxes they set! the league would be the adjusters... example. if the cap is 88 million the teams that pay more taxes would get a higher cap value... let's say 92 Million. the teams with less taxes spent would end up with a lower cap, let's say 82 million... players still all get paid the same. it's the same hard cap, even though it appears different. it's equity over equality
before you complain... the 92 million after taxes is 82 million at the end of the calculation... so the 88 million hard cap equates to 82 million after taxes. obviously made up numbers to make the point. EVERY TEAM ends up with the same ending number, every player gets the same salaries... comparable, obv som players get higher salaries. an ELC will not equal leon's salary for example, but they will all end up with the same amount of money as other players at the same salary level
Okay, so what would stop NY state deciding to tax everything over $999,999 at an absurd level to maximize tax revenues from the NHL?
@@IceNinja2007 voters
@@IceNinja2007make it Florida then any politician suggests a state income tax commits career suicide or Nevada which actually bans a state income in its state constitution.
@@IceNinja2007 That they can't target an industry, so they'd need to go after every person at that income level...and that is where literally all of the finance companies are headquartered?
Easy fix lower cap for areas that have lower taxes. Therefore even competition for all teams
So, when a team like Toronto brings in the CEO of Canadian tire to explain the vast endorsement possibilities associated with playing for them(like the leafs did with Stamkos in 16 and I'm sure other times as well) is that going to be figured in too? Otherwise you're punishing a team for having great weather and laws.
Financial parity in North American sports, which doesn't exist anywhere else in the world, is a form of 'socialism' not free market fair play. The salary cap in the NHL was implemented to prevent certain markets, and let's be honest the NHL had the Toronto Maple Leafs and NY Rangers in mind here, from building teams with as much money as they could throw at a roster that other teams simply don't have. They won't change anything regarding tax disadvantages for that very same reason, because parity isn't really their goal and never was, its all about stopping teams like the Leafs, Canadiens and the Rangers from spoiling the league's plans for growing the game because they can spend as much as they want if the salary cap was lifted tomorrow
Maybe Canadian teams or any teams where high taxes are an issue should have a higher cap ceiling
Canadian teams get 10% more cap and high tax States get between 2 & 10% reflective of tax rate. Or Florida and Texas get 10% less. Not perfect but more balanced than currently done.
Good - also let's examine local government freebies to stadia/owners - it is deeper than just state tax breaks in Tenessee, Florida and Nevada.
That won't happen, that would mean people get to look at teams books, and political shenanigans....
The only way would be to have different caps for different markets...
There are reasons why the income tax is different in different places. It is because you get different things paid by the government and therefore it is impossible to make the salary cap be based on net income. You should not keep rumbling about this thing without a deeper knowledge of how taxation and publicly funded systems work. Jesse is 100% correct, there is no universal fix on this as long as we have a hard cap.
This isn't on the players. Why wouldn't they want to play where they can get the most bang for their buck? That makes sense.
What doesn't make sense is the NHL's refusal to even the playing field.
Simple fix. Peg Cap to the State/Province/Country marginal tax rates. Those rates are known and easily quantifiable. Pro Rate the cap according to the tax rate. Highest tax rate area gets full access to the cap. Lower tax rate areas cap is reduced accordingly.
Ex. Cap is 100K
Team A has a marginal tax rate of 40%, Cap avail 100K
Team B has a marginal tax rate of 10%, Cap avail 70K
Ah yes the Florida Panthers have famously abused their tax situation to be a dominant team in the NHL throughout the entire cap era…
Tampa Bay did
This was literally not a problem when the cap was lower lol….. Jesus I’m not even a Canadian hockey market fan but even I can see that. When it was 41 million vs 90 million and taxes have flown through the roof in Canada it’s not hard to see, you still need to start a culture form a family, I’m not saying this works but it’s easy to lure players when they aren’t going to lose nearly half there money like they will in Canada lol
forget about it... to many variables to account for.