How is this allowed and not more talked about? Please explain!

[emsomaso]

I saw in the free agency thread how several members praised the Tampa GM for being able to once again get their players to accept lower salaries than they would get from other teams. This time it was Victor Hedman who have accepted a new contract with a cap hit of ”just” $8MM, before him both Stamkos and Kusherov have done the same = taken less money to stay in Tampa.

But the ”problem” is that they simply haven’t! Those players actually get more money in the pocket accepting way less in Tampa compared to what they would get in for example LA.

I seriously don’t understand how the other teams, like Kings, can accept this injustice and advantage that Tampa (and other teams like Florida and Vegas) get when their players don’t have to pay state income taxes!?!?

Of course their GM can make ”great” deals with his players when their offer of $8MM is better and gives them more money than other teams offers of $10MM!

And this is just for one player. If you take the whole team into consideration it gets even more unfair! A Kings salary cap at $85MM is basically the same as a $100MM salary cap for Tampa! That’s two great players that Tampa gets ”for free” compared to what Kings can pay. Talk about having a HUGE advantage in the hunt for a Stanley Cup!!

What’s the point with a salary cap if it’s like this? Can someone please explain?

Here is an article that better explains what I mean:
Tax tricks: How an $8.5M Lightning contract keeping Steven Stamkos in Tampa is better than $10.5M to leave

 

[jammer06]

It's allowed because we ain't no goddamn commies

 

[Pevsfreedom]

It's allowed because we ain't no goddamn commies

the proper answer to just about anything

Spoiler

comrade

 

[emsomaso]

It's allowed because we ain't no goddamn commies

Yes, I understand that’s important for you guys. And I also understand that the whole US doesn’t want to change their tax system!

But since the NHL started with the salary cap to make things more even/fair between the clubs I just think it’s odd that NHL ”allow” this since it takes away the whole purpose with the salary cap. And I think it’s even more strange that the the clubs that are disadvantaged by this and their fans doesn’t protest more about it. It’s a big differens building a Stanley Cup winner if you got $85MM to use compared to what euquals to $100MM like Tampa got to spend.

According to me at least it wouldn’t be difficult at all for the NHL to have some kind of ”fluid” salary cap for the teams so that each teams salary cap takes salary income taxes into consideration.

 

[orpheus]

It's allowed because they pay by having to live in Florida.

 

[Statue4Deano]

I saw in the free agency thread how several members praised the Tampa GM for being able to once again get their players to accept lower salaries than they would get from other teams. This time it was Victor Hedman who have accepted a new contract with a cap hit of ”just” $8MM, before him both Stamkos and Kusherov have done the same = taken less money to stay in Tampa.

But the ”problem” is that they simply haven’t! Those players actually get more money in the pocket accepting way less in Tampa compared to what they would get in for example LA.

I seriously don’t understand how the other teams, like Kings, can accept this injustice and advantage that Tampa (and other teams like Florida and Vegas) get when their players don’t have to pay state income taxes!?!?

Of course their GM can make ”great” deals with his players when their offer of $8MM is better and gives them more money than other teams offers of $10MM!

And this is just for one player. If you take the whole team into consideration it gets even more unfair! A Kings salary cap at $85MM is basically the same as a $100MM salary cap for Tampa! That’s two great players that Tampa gets ”for free” compared to what Kings can pay. Talk about having a HUGE advantage in the hunt for a Stanley Cup!!

What’s the point with a salary cap if it’s like this? Can someone please explain?

Here is an article that better explains what I mean:
Tax tricks: How an $8.5M Lightning contract keeping Steven Stamkos in Tampa is better than $10.5M to leave

You’re correct that it is an advantage and it would be easy to fix but the league and the players don’t really care. At the end of the day the players as a collective will always get their guaranteed revenue split.

If teams with tax advantages suddenly start dominating the sport then maybe the cap rules would get tweaked but look at the other professional leagues beyond the NHL there’s not really any correlation that can be drawn from tax advantage and winning a championship.

 

[symbology]

The tax issue directly impacts me and you in our daily lives a lot more than it does as fans hockey. We make more in CA, but the cost of living is higher. We pay a higher % in federal taxes, and do not get a lot of tax breaks/advantages as others because we make to much money. So, we pay a lot more taxes to have the same standard of living as someone living in Kansans that makes less money and pays a smaller percentage in taxes.

Our taxes and "fees" keep going up and up. Where is the outrage? Why the hell do I still live in CA?

 

[Birdman]

The only way to even this playing field would be to exclude State Taxes from the cap system.

This is an absolutely brilliant idea! Who wants to write the Memo to the NHL?

 

[xcheck]

They missed Nevada and Washington. Both have no state income taxes. But they can burn you in property taxes. California has really low property tax rates (but very high property values).

You can make the same argument with cost of living. It costs much more to live in New York, LA, Chicago than it does in Minneapolis, Columbus or Buffalo. While the tax concern affects highly paid players, the general cost of living differences tend to impact the lower salaried players. There is always some kind of inequity.

This also isn't unique to hockey. It is relevant for all of sports. Heck, it's even relevant for all of employment.

I think the headline overstates the difference. Remember the difference is state income tax rates and the players pay the state tax rate for the state in which they are playing. So if the Kings go on the road to Nevada, the players pay Nevada tax rates. It used to be less of a difference until [a certain someone] passed a law that capped the state income tax deduction on federal returns. If I recall correctly, Canada adjusted their tax schedules to exempt hockey players from the country's onerous taxes in order to allow the hockey franchises to better compete in the NHL.

It's complicated, but good on them for utilizing the advantage.

 

[Birdman]

The other way this can get handled now should be referrred to as “The Ohtani Manuever”. Deferring Salary for when the players are retired, and move back home into a tax free state. There is a minor risk on the players part due to Bankruptcy laws, but the fact is, just get a Bobby Bonilla check in retirement for another decade, and move to a Tax free state.

 

[jammer06]

Yes, I understand that’s important for you guys. And I also understand that the whole US doesn’t want to change their tax system!

But since the NHL started with the salary cap to make things more even/fair between the clubs I just think it’s odd that NHL ”allow” this since it takes away the whole purpose with the salary cap. And I think it’s even more strange that the the clubs that are disadvantaged by this and their fans doesn’t protest more about it. It’s a big differens building a Stanley Cup winner if you got $85MM to use compared to what euquals to $100MM like Tampa got to spend.

According to me at least it wouldn’t be difficult at all for the NHL to have some kind of ”fluid” salary cap for the teams so that each teams salary cap takes salary income taxes into consideration.

Get one thing straight, there was never an element of fairness to the cap, it was solely to keep the owners from destroying their own business model by restricting the amount they could spend on player salaries. There was never, ever, ever, ever an element of "fairness". The cap exists purely to keep the leagues owners from running their business so poorly (think the big banks that are too big to fail) that they ruin it for everyone else.

 

[Statue4Deano]

The other way this can get handled now should be referrred to as “The Ohtani Manuever”. Deferring Salary for when the players are retired, and move back home into a tax free state. There is a minor risk on the players part due to Bankruptcy laws, but the fact is, just get a Bobby Bonilla check in retirement for another decade, and move to a Tax free state.

Mike Richards already successfully pulled this off in the NHL.

 

[ICE24]

The tax issue directly impacts me and you in our daily lives a lot more than it does as fans hockey. We make more in CA, but the cost of living is higher. We pay a higher % in federal taxes, and do not get a lot of tax breaks/advantages as others because we make to much money. So, we pay a lot more taxes to have the same standard of living as someone living in Kansans that makes less money and pays a smaller percentage in taxes.

Our taxes and "fees" keep going up and up. Where is the outrage? Why the hell do I still live in CA?

I just closed on a house in another state across the country. I love my house here, however, it is time. I will still have a house in the desert so I can come back and stay for a bit, however, I will be selling the home I am in now. As I get older, I want my money to last a bit longer, so I don't have to deal with the CA tax, gas and other expenses living in So Cal. I have lived here all my life, however when I visit the new home, I feel more relaxed. My new neighbor next door told me he paid $133 for electricity last month and he said he had the AC going all month long. I told him, if I didn't have solar, I would be paying $600-700 per month in So Cal in the summer months. BTW, I paid $3.09 for gas.

 

[emsomaso]

You’re correct that it is an advantage and it would be easy to fix but the league and the players don’t really care. At the end of the day the players as a collective will always get their guaranteed revenue split.

If teams with tax advantages suddenly start dominating the sport then maybe the cap rules would get tweaked but look at the other professional leagues beyond the NHL there’s not really any correlation that can be drawn from tax advantage and winning a championship.

With teams without income taxes winning 4 of the 5 latest cups (Vegas, Tampa & Florida) maybe that advantage is starting to pay of? Add to that the fact that Nashville is spending like crazy this summer and Dallas is a steady contender (both teams without income taxes), the trend is even clearer.

And I’m not wondering about the players take on this, they get more money than most people ever can dream of. It’s mostly the fans I can’t understand, that they don’t bitch about this more. Because to me as a Kings fan it is annoying as hell that my team isn’t allowed to compete on similar terms as the before mentioned teams.

And I also finds it odd that no GM complains when his rivals can buy better players for less money the he can. If you get what I mean, it is the complete silence over this I don’t understand?

 

[Moog]

Ask the Dodgers.

 

[emsomaso]

Get one thing straight, there was never an element of fairness to the cap, it was solely to keep the owners from destroying their own business model by restricting the amount they could spend on player salaries. There was never, ever, ever, ever an element of "fairness". The cap exists purely to keep the leagues owners from running their business so poorly (think the big banks that are too big to fail) that they ruin it for everyone else.

Valid point!

 

[Statue4Deano]

With teams without income taxes winning 4 of the 5 latest cups (Vegas, Tampa & Florida) maybe that advantage is starting to pay of? Add to that the fact that Nashville is spending like crazy this summer and Dallas is a steady contender (both teams without income taxes), the trend is even clearer.

And I’m not wondering about the players take on this, they get more money than most people ever can dream of. It’s mostly the fans I can’t understand, that they don’t bitch about this more. Because to me as a Kings fan it is annoying as hell that my team isn’t allowed to compete on similar terms as the before mentioned teams.

And I also finds it odd that no GM complains when his rivals can buy better players for less money the he can. If you get what I mean, it is the complete silence over this I don’t understand?

Every point you make is spot on and makes perfect sense. The one factor you’re missing is right here in the thread, even in jest. The first two responses are how Americans/Canadians view money in sports.

Somehow it’s acceptable and good for the sport to support a hard salary cap but leveling the playing field with a relative cap that adjusts by market is considered Communism. Behold the American mind.

 

[emsomaso]

Every point you make is spot on and makes perfect sense. The one factor you’re missing is right here in the thread, even in jest. The first two responses are how Americans/Canadians view money in sports.

Somehow it’s acceptable and good for the sport to support a hard salary cap but leveling the playing field with a relative cap that adjusts by market is considered Communism. Behold the American mind.

Thank you for explaining. As a swede it is a bit difficult for me to understand that way of thinking, but it explains why this isn’t a big thing here!

 

[JWR]

It's allowed because they pay by having to live in Florida.

Well the fact Florida does not have a state income tax allows them to pay less than a team in California 12.3% or New York 10.9% to pocket the same amount

 

[Sevenhole]

They missed Nevada and Washington. Both have no state income taxes. But they can burn you in property taxes. California has really low property tax rates (but very high property values).

You can make the same argument with cost of living. It costs much more to live in New York, LA, Chicago than it does in Minneapolis, Columbus or Buffalo. While the tax concern affects highly paid players, the general cost of living differences tend to impact the lower salaried players. There is always some kind of inequity.

This also isn't unique to hockey. It is relevant for all of sports. Heck, it's even relevant for all of employment.

I think the headline overstates the difference. Remember the difference is state income tax rates and the players pay the state tax rate for the state in which they are playing. So if the Kings go on the road to Nevada, the players pay Nevada tax rates. It used to be less of a difference until [a certain someone] passed a law that capped the state income tax deduction on federal returns. If I recall correctly, Canada adjusted their tax schedules to exempt hockey players from the country's onerous taxes in order to allow the hockey franchises to better compete in the NHL.

It's complicated, but good on them for utilizing the advantage.

I moved from California to Washington partly for my job but also considering the state tax. Once I was there it was evident it wasn’t that much less. States find a way to stiff it to you in different ways. Washington prop taxes, believe it or not vehicle violations are a bid % of state revenue that then increases your insurance, liquor taxes are insane once the voters eliminated the state liquor stores. A quality bottle of vodka in CA for $37 will cost you nearly $65 in Washington. That almost alone drove me to move to Colorado. I must have my vodka.