tag:blogger.com,1999:blog-3435571560723564995.post108889534219147157..comments2023-06-01T21:15:57.354-11:00Comments on The H Does NOT Stand For Habs: The Tax TiltJ.T.http://www.blogger.com/profile/00012075493503316318noreply@blogger.comBlogger11125tag:blogger.com,1999:blog-3435571560723564995.post-61393465270010582082012-07-04T04:50:40.028-11:002012-07-04T04:50:40.028-11:00Thanks for the link to the Graph. I agree it would...Thanks for the link to the Graph. I agree it would suck to make 400K less due to taxes. However, I don't think that taxes are such a main deciding factor as people make it seem. Not worth creating new rules anyway. Players seem to love to go to NYC and LA. The 300K that you would save in those cities over Montreal will simply be spent on Schools, Houses, and municipality taxes etc. I think a player paid 7 million in Montreal would end up with way more loose cash than in NY or LA. <br /><br />In theory every GM would love to have that extra 2-3 mil by saving on taxes. However, the major markets are spending what ever they can to get to the cap floor to please their fan base. Last year Montreal could have buried Gomez and got 6mil more. However, they had nothing to go get with that much money. <br />Even if there wasn't a cap ceiling, a rich team like Montreal wouldn't be able to get all the "superstars". Even if they offered 1mil per player more that any other offers, they wont all sign here. Parise has it right when he told the media when asked what goes into choosing a team "EVERYTHING". Money, Housing, Schools for kids, temperature, job opportunity for trophy wife, travel schedule, franchise stability, terms... I think even the Jersey colors might have something to do with it. <br />Anyway JT, I like your posts, just thought i'dd give my opinion.<br />JMAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-3435571560723564995.post-41607948250618806592012-07-02T15:36:26.484-11:002012-07-02T15:36:26.484-11:00I'm told that here in crumbling Montreal the s...I'm told that here in crumbling Montreal the situation might not be as dire for the players as it is indicated by the Post's figures (presumably the official ones, as established by the federal and provincial income tax laws). How much do they actually pay off at the end of their fiscal year, once the agents and their accountants are done using every loophole available? Perhaps not that much, or so I'm told. And no one will openly brag about it: not the players, not the teams, not the provincial government, not the agents. And I suppose that it could be the case in many other officially high taxing locales.<br /><br />This of course would only complicate the finding of the answer that you seek JT to such vexed question (sorry).<br /><br />LouisLouisnoreply@blogger.comtag:blogger.com,1999:blog-3435571560723564995.post-41622526117973585972012-07-01T05:57:44.848-11:002012-07-01T05:57:44.848-11:00Taxes are one of many factors a free agent will co...Taxes are one of many factors a free agent will consider in deciding where to sign. Some factors like team culture, team facilities and teammates are controlled by management. Others like taxes, culture of the city, endorsement opportunities, and the state of bridge repairs are not controlled by management.<br /><br />If the player doesn't like some of the other factors then management can try to compensate for them by offering a higher salary, longer term, and no trade clauses. <br /><br />The player can then decide whether management's offer is sufficient to over come the factors he doesn't like (Travis Moen just said that getting a fourth year was the key to him resigning).<br /><br />Dictating how a team compensates a player for higher taxes assumes that this was a major factor in his decision and removes the ability of the player and the team to negotiate any compensation if it was.<br /><br />Furthermore, your proposal would be extremely expensive as it would compensate all players for the tax difference. The Habs would have to pay about $14 M a year based on a $70 M payroll and the example you quoted (The Habs would have to pay an additional $800,000 - 20% of a $4 M salary - to give the player an extra $400,000 in after tax income. 20$ of $70 M is $14 M).<br /><br />The only way the owners (Though I doubt that Molson would like to pay an extra $14 M a year) would agree to this is if it came out of the 57% of revenue the players get. <br /><br />However, players on lower tax teams would object to this because the extra payments would effectively come out of their pockets - since total salaries are fixed at 57% of revenue any increased payments to some players automatically results in a higher escrow charge to all players.<br /><br />One last point. Endorsement opportunites vary depending on how big a star the player is and the market he plays in. As a result, a city with good endorsement opportunities is a selling point to a team trying to sign a star UFA.<br /><br />DBAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-3435571560723564995.post-83218296706602002132012-07-01T05:41:31.421-11:002012-07-01T05:41:31.421-11:00taxes are really low in Afghanistan.
But I agree t...taxes are really low in Afghanistan.<br />But I agree there should be some kind of neutralizing mechanism. Like low tax teams have to pay a fine.Stevehttps://www.blogger.com/profile/14162783936999869984noreply@blogger.comtag:blogger.com,1999:blog-3435571560723564995.post-88329948952049338592012-07-01T02:10:11.516-11:002012-07-01T02:10:11.516-11:00Thanks for the article and graph. It is interestin...Thanks for the article and graph. It is interesting to see how much provincial taxes make a city uncompetitive in those salary ranges. (That's what we're talking of right? Municipal taxes wouldn't be included - there's a nightmare in itself.)<br /><br />So Edmonton and Calgary are right up there with the sunshine states while LA, San Jose, and Anaheim are right down there with the other "Tax you for my feel good idea." provinces. <br /><br />All to say that you can't establish a baseline and then even it out. That is impossible. You can't ask someone in Edmonton to pay a Montreal player's taxes and if you ask the owners to do it the provinces will just tax them even more. <br /><br />Myself I kind of like the idea of players saying "Thank you" and donating money to hospital wings and other charities so the taxman doesn't take it and build bridges and overpasses that collapse with his friend in the waste management...err...construction business. But I'm strange that way.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3435571560723564995.post-24235339403210879312012-06-30T10:19:33.875-11:002012-06-30T10:19:33.875-11:00@zaskar: Good point.
@Shawn: Thanks!
@DB: You ma...@zaskar: Good point.<br /><br />@Shawn: Thanks!<br /><br />@DB: You make some interesting points here. However, in your point five, you mention changes in a player's salary if he were to be traded. My thought is simply that the team rather than the player would cover the cost of excess tax, so the player would basically get the same salary no matter where he went. And, in your point three, I don't see longer term deals and no-trade clauses as equalizers. If a team has to hand them out to make up for the tax hit, it runs a higher risk of ending up with expensive, burdensome contracts it can't move. Also, endorsements are just bonuses for certain star players and should have nothing to do with the basic salary he makes from the team.<br /><br />Lots of food for discussion there!J.T.https://www.blogger.com/profile/00012075493503316318noreply@blogger.comtag:blogger.com,1999:blog-3435571560723564995.post-59530879115213392472012-06-30T06:06:44.748-11:002012-06-30T06:06:44.748-11:00There are a number of reasons why the NHL won'...There are a number of reasons why the NHL won't address the tax issue.<br /><br />1) Taxes are an issue, but only for players with leverage. In demand UFAs and RFAs within a year or 2 of UFA status can demand more to make up for the higher tax load.<br /><br />UFAs scrambling for a job like Campoli, RFAs, and players on entry level contracts don't have the leverage to get the higher salary to offset the higher taxes.<br /><br />2. Most of the low-tax jurisdiction teams can't afford to spend to the cap while many of the high tax teams can. This financial advantage covers the extra salary needed to offset the tax disadvantage.<br /><br />3. Teams can offer security like no trade clauses and longer term instead of a higher salary to offset the tax difference. Montreal does this routinely.<br /><br />4. It would cost the high tax teams money in two ways - they would be spending more than the cap and by opening the tax door the NHLPA would likely try to get the benefit for all of its members.<br /><br />5. There are a number of logistical issues that would need to be addressed like what happens when tax rates change and what would happen to a player's salary when he was traded from a high tax team to a low tax team and vice-versa. <br /><br />This is further complicated by the residency rules that determine in what jurisdiction someone pays taxes. For example, when Gill was traded he left his family behind for a couple of months. That could mean he would be subject to Quebec taxes for those months.<br /><br />6. The ability to get endorsement income is better for players on most of the high tax teams than on the low tax teams.<br /><br />7. Players can only demand a higher salary to offset the higher taxes if a low tax team is a serious contender for their services. If the only teams interested are all high tax teams then the player has lost the negotiating advantage.<br /><br />DBAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-3435571560723564995.post-83807922754717007572012-06-30T01:18:17.169-11:002012-06-30T01:18:17.169-11:00As usual - another great articleAs usual - another great articleShawnnoreply@blogger.comtag:blogger.com,1999:blog-3435571560723564995.post-46246681607911864942012-06-29T15:36:21.811-11:002012-06-29T15:36:21.811-11:00Hi J.T.
Interesting post and I agree with your ...Hi J.T. <br /><br />Interesting post and I agree with your conclusion that Molson and other owners in highly taxed markets won't directly address the issue in the ongoing negotiations for a new CBA. However, I do believe the issue could be raised in a more subtle yet indirect way. Owners such as Molson could choose to make up the difference in lost earnings by offering endorsement deals to their star players. I believe this is not permitted in the current CBA but look for it or something similar in the new CBA as the rich clubs try to gain advantage by finding ways to spend over the cap. This type of arrangement would not require league management - like the salary cap - and could be done on a case-by-case basis. <br /><br />Cheers,<br />Peterzaskarhttps://www.blogger.com/profile/14658728661481054711noreply@blogger.comtag:blogger.com,1999:blog-3435571560723564995.post-63488317959667039322012-06-29T13:49:18.888-11:002012-06-29T13:49:18.888-11:00Dear Anon: The point of this post wasn't to co...Dear Anon: The point of this post wasn't to compare your poor life to those of NHL players. It was to compare the salaries of NHL players to other NHL players and point out how some cities have an advantage in signing and retaining players because they keep more of their money in their pockets. Since you want to compare this idea to your own life, let's say the garbage man in Tampa makes 15-thousand dollars a year. So do you. But, you live in Montreal where your taxes are higher. Therefore, you will only keep 12-thousand of your salary, while the garbage man in Tampa keeps 14-thousand of his. Where would you rather pick up the trash? Right.<br /><br />I understand your anger and jealousy at the money NHL players make. Most normal people do, because it's completely ridiculous that ordinary mortals should be singled out and rewarded with such cushy lives when others have to slave away for peanuts, just because they can put a little black piece of rubber in the back of a net. However, we pay for the privilege of watching them do that, so we naturally want them to do it more often than the guys on the other side. If they do, we're willing to give them millions of dollars. My point is, why pay them more millions than the fans of other teams pay, just because our government taxes them higher than others?<br /><br />P.S. Sorry about your pitiful salary.J.T.https://www.blogger.com/profile/00012075493503316318noreply@blogger.comtag:blogger.com,1999:blog-3435571560723564995.post-36637523828774673822012-06-29T11:15:27.863-11:002012-06-29T11:15:27.863-11:00You mention 'limited earning time'; so a g...You mention 'limited earning time'; so a guy's pulling in $4 million per year and I should feel concern for him because he can only earn $4 million for like 10 years? I'd love to only have to work for 10 years, let alone take in $2 mill after taxes. Instead, I suppose I'll have to work for 45 years at a pitiful salary, while dealing with health issues like stress, which can lead to heart and other major health issues, from trying to fund a mortgage, parents needing care in their old age; dealing with my own declining hips and knees and heart; and likely having no state pension ('league coffers') worth mentioning (that I've also paid into for 45 years), so I have to live in a smaller home, with none of the travel I dreamed of, and while I watch my spouse fade away because we can't afford the 'right' doctor. Yep, I feel abject horror at the poor lives these guys live. There ought to be a way to help them...Anonymousnoreply@blogger.com