| how would you fix the salary cap? [message #742004] |
Wed, 28 August 2019 16:25  |
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 Adam
Messages: 13144
Registered: August 2005
Location: Edmonton, AB
6 Cups
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Leave it as is. There's no good way to correct for taxes, and taxes aren't stable anyhow, so it would get hopelessly complicated coming up with a formula that keeps it always in balance (not to mention, a change in tax code mid-season could impact what a team had available for cap space).
Ultimately the difference is only a few percentage points from top to bottom, and overall dollars is only one factor when a player is choosing his team. The Rangers have never struggled to sign players, even though they're in one of the highest tax jurisdictions.
This probably means if you're Edmonton, you need to have a good team to be competitive for free agents, but that's fine. I don't mind there being pressure on management not to suck, and I would prefer we're unable to land expensive UFAs when we DO suck - since they're unlikely to play to their contract value anyhow.
"This team needs an enema!"
#FireLowe #FireMacT #FireHowson #FireBuchberger #FireHowsonAgain #FireChiarelli #FireMcLellan #FireBobbyNicks and...SIGH...#FireTheGretzkys
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CrusaderPi
Messages: 11444
Registered: December 2003
Location: AB Highway 100
6 Cups
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Equity of outcome is impossible. It's not the NHL's place to set taxes for their franchise's locations. Don't like it? Cheer for Tampa and enjoy your socialized health care.
This is fine.
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Xombie
Messages: 1262
Registered: March 2004
Location: E-Town
1 Cup
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What if for cap hit the take-home pay is the only part that counts against the cap? Like the announced salary numbers are what the player gets, and the tax is calculated after cap. So whether it's Florida or Alberta, guy signs for 5 mill, and the rich billionaire owners pay the tax. So then the owners are the ones penalized for location. Katz pays 5 mill plus whatever the tax on that, but we fans only hear and care about the 5 mill cap hit. Florida owner keeps more of his money but that's the cost of doing business.
Also what if there was no front or backloading of contracts? Like you sign 5 years and want 30 mill, you're gonna get 6 mill every year. No more of this first year 22 mill, then 2 mill the other 4 years malarkey.
This might mean no more performance or signing bonuses. Those are just cap circumvention tools anyway.
Bob Marley and the (Hartford) Wailers.
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bigEfromGP
Messages: 1740
Registered: July 2006
Location: GP, AB
1 Cup
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Income tax only tells part of the story. Property taxes in some US cities are extremely high compared to most Canadian cities (like +$40k/year for a $1MM house). Doesn't completely erase the difference obviously but just one more aspect to consider.
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PlusOne
Messages: 2393
Registered: July 2006
Location: Regina, Sask
2 Cups
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| bigEfromGP wrote on Wed, 28 August 2019 19:06 |
Income tax only tells part of the story. Property taxes in some US cities are extremely high compared to most Canadian cities (like +$40k/year for a $1MM house). Doesn't completely erase the difference obviously but just one more aspect to consider.
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I have been arguing this side of it for years so thanks for bringing it up. There are a pile of factors that play into the end result, or disposable income.
Also, it has been mentioned recently in another thread but it isnt as simple as the example given of "That's a, 11% difference. If you'd signing an 8 million dollar a year deal, you get $880,000 more per year in your pocket."
Each player pays taxes where they play the game. So for a TB player 41 games would be taxed at that rate but 41 would be taxed at variable rates.
Trying to account for that would be a nightmare regardless of the system.
I have a handful of acquaintances that have played in the NHL and one in the NFL. I see why some get ripped off by financial managers. A couple had a grasp on things but a couple others had zero idea where the money went and how they paid taxes, etc.
Survivor LX(I) and 67 Champ(i)on
| CrusaderPi wrote on Thu, 30 January 2020 12:21 |
und(i)sputed O.L.F.N Heavybra(i)n Champ(i)on of the Woooooooooooooooooorld. Plus. One.
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Pseudoreality
Messages: 600
Registered: December 2002
Location: Yellowknife
No Cups
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Well, considering the Oilers have been in the toilet for all but 2 of 13 years the NHL has had a salary cap, I can't say I'm a huge fan. I much prefer teams to have budgets and paid players based on the revenue they generated, not just blindly spend to the cap and then ask taxpayers to fund their arenas. If you are really concerned about rich teams spending way more, well then put in a progressive luxury tax that gets redistributed like a reverse escrow.
I wouldn't do anything about differences in income tax rates across North America. Sure they can be higher in Canada, but then the players are paid in US dollars in Canada and outside of Tor/Van, it's cheap to live.
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 smyth260
Messages: 2058
Registered: November 2007
2 Cups
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| Pseudoreality wrote on Wed, 28 August 2019 21:17 |
Well, considering the Oilers have been in the toilet for all but 2 of 13 years the NHL has had a salary cap, I can't say I'm a huge fan. I much prefer teams to have budgets and paid players based on the revenue they generated, not just blindly spend to the cap and then ask taxpayers to fund their arenas. If you are really concerned about rich teams spending way more, well then put in a progressive luxury tax that gets redistributed like a reverse escrow.
I wouldn't do anything about differences in income tax rates across North America. Sure they can be higher in Canada, but then the players are paid in US dollars in Canada and outside of Tor/Van, it's cheap to live.
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Oilers have spent to the cap every year, except for McDavid's third season when they traded Jordan Eberle for cap space.
Clean house or bust
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RDOilerfan
Messages: 5368
Registered: January 2016
5 Cups
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I don't think there is a way to fix it. As was mentioned, yes here is tax disparity across the 2 countries but there is also disparity between provinces and states. So if you are trying to make it fair because of the tax disparity, you'd almost have to have a separate salary cap depending on where the team was located. Florida teams would get a certain cap, New York teams a different one, Alberta teams a different one, etc. So it wouldn't work.
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CrudeRemarks
Messages: 1964
Registered: November 2010
Location: Edmonton
1 Cup
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What if there was an even up the following year. So teams' post-tax salaries were determined and if you were below the average then you get that as a bonus the following year and if you were above you get a penalty.
You can't always get what you want, but if you try sometimes, you just might find, you can get a lottery pick.
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RDOilerfan
Messages: 5368
Registered: January 2016
5 Cups
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| CrudeRemarks wrote on Thu, 29 August 2019 08:26 |
What if there was an even up the following year. So teams' post-tax salaries were determined and if you were below the average then you get that as a bonus the following year and if you were above you get a penalty.
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Interesting idea. I do agree the disparity of taxes is a problem. Kucherov won the scoring title last season and is a 9.5 mill cap hit. But with the disparity in taxes, if he was somewhere else, I bet his cap hit would be way higher. Add 2 mill to his cap hit somewhere else and. Go down the list of Tampa's guys. Hedman is a Norris guy who signed in 2016 for 7.875 mill. He's under paid cap hit wise. I bet if he was somewhere else, add 2 mill to his deal. So while Tampa has been run relatively well, they also have a big advantage. I really doubt the players care what their cap hit is, they just want their take home to be on par with other players they feel they in the same category with.
[Updated on: Thu, 29 August 2019 08:46]
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mightyreasoner
Messages: 3056
Registered: October 2005
Location: Edmonton
3 Cups
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A few years ago, Alberta had one of the most favourable tax brackets in the NHL and the Oilers just wasted it with awful teams. How can I get upset with teams who have that advantage now and actually use it well?
https://www.canadianbusiness.com/blogs-and-comment/how-the-f iscal-cliff-might-give-canadian-nhl-teams-a-boost/amp/
I tend to think that most markets have a "selling point" that they can leverage, and the good managers know how to do that well. I truly am not worried, I think the salary cap has been successful overall. There is parity around the league and it reward competent management who know when to go for it and when to plan for the future.
[Updated on: Thu, 29 August 2019 13:28]
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