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Wings' Brian Rafalski slams Tennessee's new 'jock tax'

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Old
03-28-2010, 06:39 PM
  #26
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Originally Posted by BigFatCat999 View Post
I'll be the first one to say that the TN jock tax is crap. Its very arbitrary and hurts the Preds just as much as it hurts other teams. If it were a federal tax we would be talking about a Supreme Court case and the constitutionality of the tax.

Why NFL and MLB players are exempt is beyond me.
My guess is that the NFL was allowed to find a loophole. Nashville is a Titans town, and chances are that if this tax had any bearing on the NFL that the local media would fry it and the politician that sponsored it. The folks of Nashville really love that NFL team.

Don't take that as an Anti-Predators statement. I bought season tickets the first year that I moved down there, and of course the NHL went into a lockout... and I got a refund check. I was only in Nashville for a year and a half and did not get a good read on how the hockey atmosphere of Nashville was.

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03-28-2010, 07:05 PM
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My guess is that the NFL was allowed to find a loophole...
Loophole or not, a challenge to the law in federal court would almost certainly get the law stricken down on equal protection grounds.

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03-28-2010, 07:38 PM
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Loophole or not, a challenge to the law in federal court would almost certainly get the law stricken down on equal protection grounds.
Maybe so. I am sure the NHL isn't going to allow this to apply - just to hockey.

My commentary was based off of the short time that I was in Nashville. I moved there from CT, and I was pretty impressed in their support of the Titans. Tickets to the Titans were not that easy to get, but the company that I worked for was a part of the GEC empire. Which later led to me filling out (and paying for) Predators season tickets. Bu

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03-28-2010, 11:44 PM
  #29
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Originally Posted by cptjeff View Post
Loophole or not, a challenge to the law in federal court would almost certainly get the law stricken down on equal protection grounds.
Indeed, and several other fun challenges could arise from it as well...

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03-29-2010, 12:30 AM
  #30
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Cant see this sticking. It stinks.

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03-29-2010, 12:55 AM
  #31
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For an european this sounds unbelieveable. How can a state introduce a tax that forces single group of out-of-state professionals to pay extra taxes for simply coming to the town for few days a year and then apply the law only to certain sports while excluding other sports?? Incredible.

How come states even have the right to tax people from other states just like that?

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03-29-2010, 12:57 AM
  #32
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Originally Posted by Pepper View Post
For an european this sounds unbelieveable. How can a state introduce a tax that forces single group of out-of-state professionals to pay extra taxes for simply coming to the town for few days a year and then apply the law only to certain sports while excluding other sports?? Incredible.

How come states even have the right to tax people from other states just like that?
yup, this phase should ring a bell to all Americans...."no taxation without representation"

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Old
03-29-2010, 01:11 AM
  #33
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Originally Posted by JustWingIt19 View Post
yup, this phase should ring a bell to all Americans...."no taxation without representation"
I don't know... the Lions would still be playing in the Silverdome if it weren't for the hotel tax the city of Detroit instituted. Taxing out of staters is a common practice, it's politically prudent.

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03-29-2010, 01:15 AM
  #34
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I don't know... the Lions would still be playing in the Silverdome if it weren't for the hotel tax the city of Detroit instituted. Taxing out of staters is a common practice, it's politically prudent.

ofcourse it is....unless your the one being taxed.

I was always pissed every 2 weeks when i got my paycheck and i saw i had to pay city of Detroit taxes even though i didn't live in the city. But i'm sure city residents didn't mind getting my tax dollars

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03-29-2010, 01:42 AM
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Originally Posted by Brodie View Post
I don't know... the Lions would still be playing in the Silverdome if it weren't for the hotel tax the city of Detroit instituted. Taxing out of staters is a common practice, it's politically prudent.
Is that tax for everyone who stays in a hotel or only for people from other states?

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03-29-2010, 01:48 AM
  #36
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Over here cities can't make up any taxes, other than the municipality-tax which is a fixed-% of your salary for every resident of that municipality. All other taxes are decided by and collected by the government.

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03-29-2010, 02:35 AM
  #37
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Is that tax for everyone who stays in a hotel or only for people from other states?
You know, I'm not sure.

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Old
03-29-2010, 03:18 AM
  #38
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You know, I'm not sure.
I'm quite certain the Hotel taxes are a tax on hotel rooms...period. Not a tax put on only the bills of guests from out-of-state.
More often than not (aside from the quickies at the no-tell Motel) people staying in hotels aren't from the area...so it's taxing people that probably aren't locals.

It's the same with rental car taxes....it's not often local citizens are renting cars, it's outsiders that get hit most by the tax.

Anyone know if any of these wild taxes are on the books anywhere in Canada? We're pretty tax happy up here...but I've never heard of anything like this before.

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Old
03-29-2010, 10:16 AM
  #39
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Anyone know if any of these wild taxes are on the books anywhere in Canada? We're pretty tax happy up here...but I've never heard of anything like this before.
How are these "wild taxes"?

They've been around for a long time, many many states/countries have them, they aren't fundamentally any different than the way other entertainers (eg, touring bands, or actors coming to town to make a movie) are taxed.

And yes, these taxes do exist in Canada, covering US athletes/entertainers crossing the border.

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Old
03-29-2010, 10:27 AM
  #40
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The tax is silly and punitive. It could probably be challenged in the TN Tax Courts, but that would lead to some interesting headlines ("Millionaire athletes seeking tax break!").

I am firmly against using any tax code in this manner.

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Old
03-29-2010, 10:35 AM
  #41
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This is illegal under the US constitution but that would only truly apply to Federal taxes. As for states they operated under their tax codes and their state constitutions.

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Old
03-29-2010, 10:50 AM
  #42
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how does a player actually lose money out of this?

using the Eaves example of close to, if not the league minimum of 525k. eaves makes 6402 per game. so even with the tax he's still banking 3902 per game. even after other taxes he should still make money.

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03-29-2010, 11:00 AM
  #43
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how does a player actually lose money out of this?

using the Eaves example of close to, if not the league minimum of 525k. eaves makes 6402 per game. so even with the tax he's still banking 3902 per game. even after other taxes he should still make money.
Players are paid a daily rate (and that's how the cap is tracked), so this year, there are 193 days. Divide Eaves annual amt by 193.

$2590.67/day is the contracted amount. For the three games in Nashville, he will pay $7500. So essentially, in theory, he keeps $90 of his gross. However, NHL players do not receive their full gross. Thanks to escrow, he's only getting 82% of the contracted amount--- or $410,000. That figure can vary and work in the players' favor, but this year, the retention rate has been 18%. If NHL HRR fails to grow 5% over last year, AND the majority of teams exceed the midpoint of the cap, players will give money back to the league.

The actual daily pay for Eaves is $2124. He'll end up giving Tennessee more than what he actually earns in one day.

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Old
03-29-2010, 11:06 AM
  #44
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Players are paid a daily rate (and that's how the cap is tracked), so this year, there are 193 days. Divide Eaves annual amt by 193.

$2590.67/day is the contracted amount. For the three games in Nashville, he will pay $7500. So essentially, in theory, he keeps $90 of his gross. However, NHL players do not receive their full gross. Thanks to escrow, he's only getting 82% of the contracted amount--- or $410,000. That figure can vary and work in the players' favor, but this year, the retention rate has been 18%. If NHL HRR fails to grow 5% over last year, AND the majority of teams exceed the midpoint of the cap, players will give money back to the league.

The actual daily pay for Eaves is $2124. He'll end up giving Tennessee more than what he actually earns in one day.
ahh, i see, thanks for the clarification.

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Old
03-29-2010, 01:31 PM
  #45
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Case Study: Ian McKenzie

Here's a little case study I did over on the Wings board to put some hard numbers to this issue.....

Scenario: In 2010-11, the Nashville Predators recall F Ian McKenzie for back-to-back home games and then send him back the Milwaukee after the second game. This means he will have 2 days in the NHL where he played 2 games in Tenneesee. I will assume that the 2010-11 NHL season will also be 193 days long. I will assume the AHL/ECHL season will be 193 days long as well. He will play an identical number of games (25) for the ECHL Cincinnati Cyclones as he has this season.

Salary: Ian McKenzie has a 2010-11 NHL salary of $500,000. His 2010-11 AHL/ECHL salary is $45,000.

Tax Info: Ian McKenzie is a single male who lives in Saskatchewan. For US tax purposes he will file as Single.

First, let us determine what Ian McKenzie's daily pay is at each level:
LevelSalaryDaysDaily Salary
NHL$500,000193$2,590.67
AHL$45,000193$233.16
ECHL$45,000193$233.16

Now let us determine what Ian McKenzie's total salary will be at each level:
LevelDaily SalaryDaysTotal Salary
NHL$2,590.672$5,181.34
AHL$233.16166$38,704.56
ECHL$233.1625$5,829.00
This makes for a total annual income for 2010-11 of $49,714.90

Now let's determine what his income by state and city will be. For this we will assume all games at the AHL/ECHL level are home games for simplicity:
State/CityIncome
Tennessee/Nashville$5,181.34
Wisconsin/Milwaukee$38,704.56
Cincinnati/Ohio$5,829.00

Now let us evaluate the total taxes he will pay:
TaxApplicable IncomeTax RateTotal Taxes
US Federal Income$49,714.9025%$12,428.73
US Social Security + Medicare$49,714.907.65%$3,803.19
Canadian Federal Income$49,714.9015% on first $40,970; 22% on next $8,744.90$8,069.38
Sasketchewan Provincal$49,714.9011% on first $40,354; 13% on next $9,360.90$5,655.86
Tennessee 'Jock Tax'$5,181.34$2,500.00 per game$5,000.00
Wisconsin Income$38,704.564.6% on first $10,220; 6.15% on next $10,220; 6.5% on next $18,264.56$2,285.85
Ohio Income$5,829.000.743% on first $5,000; 1.486% on next $829.00$49.47
Cincinnai Income$5,829.002.1%$122.41
NHL escrow$5,181.3418%$932.64
* NOTE: This is far from a complete list as there will be additional taxes for cities and states that away games are in. This assumes only home games and taxes for simplicity.

Now let us see how much money he earned for his 2-game, 2-day stint in Nashville:
Total Gross Salary$5,181.34
US Federal Income$1,295.34
US Social Security + Medicare$396.37
Canadian Federal Income$841.00
Sasketchewan Provincal$589.46
Tennessee 'Jock Tax'$5,000.00
NHL escrow$932.64
Total Net Salary-$3,873.47
So Ian McKenzie would pay out-of-pocket nearly $3,900 for his two days of work in Nashville once income taxes are factored.

Now let us evaluate his total income:
Total Gross Salary$49,714.90
US Federal Income$12,428.73
US Social Security + Medicare$3,803.19
Canadian Federal Income$8,069.38
Sasketchewan Provincal$5,655.86
Tennessee 'Jock Tax'$5,000.00
Wisconsin Income$2,285.85
Ohio Income$49.47
Cincinnai Income$122.41
NHL escrow$932.64
Total Net Salary$11,367.37
This means his amount of money lost for playing 2 games in Nashville represented roughly 34% of his final net income.

As a hypothetical, this is how much tax Ian McKenzie would pay if he only played in the AHL/ECHL:
TaxApplicable IncomeTax RateTotal Taxes
US Federal Income$45,000.0025%$11,250.00
US Social Security + Medicare$45,000.007.65%$3,442.50
Canadian Federal Income$45,000.0015% on first $40,970; 22% on next $4,030.00$7,032.10
Sasketchewan Provincal$45,000.0011% on first $40,354; 13% on next $4,646.00$5,042.92
Wisconsin Income$39,171.004.6% on first $10,220; 6.15% on next $10,220; 6.5% on next $18,731.00$2,316.17
Ohio Income$5,829.000.743% on first $5,000; 1.486% on next $829.00$49.47
Cincinnai Income$5,829.002.1%$122.41

And this would be his total income without the NHL stint:
Now let us evaluate his total tax burden and income:
Total Gross Salary$45,000.00
US Federal Income$11,250.00
US Social Security + Medicare$3,442.50
Canadian Federal Income$7,032.10
Sasketchewan Provincal$5,042.92
Wisconsin Income$2,316.17
Ohio Income$49.47
Cincinnai Income$122.41
Total Net Salary$15,744.43
Notice a difference? Ian McKenzie would make a larger net salary at the end of the season if he doesn't play in Nashville, even with a lower gross salary.

Here's the actual numbers:
 Gross SalaryNet Salary
With NHL recall$49,714.90$12,300.01
Without NHL recall$45,000,000$15,744.43
Difference+$4,714.90-$3,444.42
So despite having a gross income of roughly $4,700 more if he plays two games in the NHL, his net income will be roughly $3,400 LESS because of the Tennessee 'jock tax'.

Keep in mind this case study was done using an actual player in the Predators system. Theoretically a player in this circumstance could be earning an AHL salary as low as the minimum, which is $36,500. A player on an ELC would earn between $36,500 and $67,500 in the AHL under the current CBA.

Please note that I'm no tax expert so I'm sure there are additional taxes I may not have accounted for or tax agreements that I am not taking into account. This would obviously change to some extent if the case study player were from another country such as Sweden, Finland, USA, Russia, etc. I'm also not sure if the taxable income is the pre-escrow or post-escrow number so that could also change.

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03-29-2010, 01:57 PM
  #46
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Quote:
Originally Posted by FissionFire View Post
Here's a little case study I did over on the Wings board to put some hard numbers to this issue.....

Scenario: In 2010-11, the Nashville Predators recall F Ian McKenzie for back-to-back home games and then send him back the Milwaukee after the second game. This means he will have 2 days in the NHL where he played 2 games in Tenneesee. I will assume that the 2010-11 NHL season will also be 193 days long. I will assume the AHL/ECHL season will be 193 days long as well. He will play an identical number of games (25) for the ECHL Cincinnati Cyclones as he has this season.

Salary: Ian McKenzie has a 2010-11 NHL salary of $500,000. His 2010-11 AHL/ECHL salary is $45,000.

Tax Info: Ian McKenzie is a single male who lives in Saskatchewan. For US tax purposes he will file as Single.

First, let us determine what Ian McKenzie's daily pay is at each level:
LevelSalaryDaysDaily Salary
NHL$500,000193$2,590.67
AHL$45,000193$233.16
ECHL$45,000193$233.16

Now let us determine what Ian McKenzie's total salary will be at each level:
LevelDaily SalaryDaysTotal Salary
NHL$2,590.672$5,181.34
AHL$233.16166$38,704.56
ECHL$233.1625$5,829.00
This makes for a total annual income for 2010-11 of $49,714.90

Now let's determine what his income by state and city will be. For this we will assume all games at the AHL/ECHL level are home games for simplicity:
State/CityIncome
Tennessee/Nashville$5,181.34
Wisconsin/Milwaukee$38,704.56
Cincinnati/Ohio$5,829.00

Now let us evaluate the total taxes he will pay:
TaxApplicable IncomeTax RateTotal Taxes
US Federal Income$49,714.9025%$12,428.73
US Social Security + Medicare$49,714.907.65%$3,803.19
Canadian Federal Income$49,714.9015% on first $40,970; 22% on next $8,744.90$8,069.38
Sasketchewan Provincal$49,714.9011% on first $40,354; 13% on next $9,360.90$5,655.86
Tennessee 'Jock Tax'$5,181.34$2,500.00 per game$5,000.00
Wisconsin Income$38,704.564.6% on first $10,220; 6.15% on next $10,220; 6.5% on next $18,264.56$2,285.85
Ohio Income$5,829.000.743% on first $5,000; 1.486% on next $829.00$49.47
Cincinnai Income$5,829.002.1%$122.41
NHL escrow$5,181.3418%$932.64
* NOTE: This is far from a complete list as there will be additional taxes for cities and states that away games are in. This assumes only home games and taxes for simplicity.

Now let us see how much money he earned for his 2-game, 2-day stint in Nashville:
Total Gross Salary$5,181.34
US Federal Income$1,295.34
US Social Security + Medicare$396.37
Canadian Federal Income$841.00
Sasketchewan Provincal$589.46
Tennessee 'Jock Tax'$5,000.00
NHL escrow$932.64
Total Net Salary-$3,873.47
So Ian McKenzie would pay out-of-pocket nearly $3,900 for his two days of work in Nashville once income taxes are factored.

Now let us evaluate his total income:
Total Gross Salary$49,714.90
US Federal Income$12,428.73
US Social Security + Medicare$3,803.19
Canadian Federal Income$8,069.38
Sasketchewan Provincal$5,655.86
Tennessee 'Jock Tax'$5,000.00
Wisconsin Income$2,285.85
Ohio Income$49.47
Cincinnai Income$122.41
NHL escrow$932.64
Total Net Salary$11,367.37
This means his amount of money lost for playing 2 games in Nashville represented roughly 34% of his final net income.

As a hypothetical, this is how much tax Ian McKenzie would pay if he only played in the AHL/ECHL:
TaxApplicable IncomeTax RateTotal Taxes
US Federal Income$45,000.0025%$11,250.00
US Social Security + Medicare$45,000.007.65%$3,442.50
Canadian Federal Income$45,000.0015% on first $40,970; 22% on next $4,030.00$7,032.10
Sasketchewan Provincal$45,000.0011% on first $40,354; 13% on next $4,646.00$5,042.92
Wisconsin Income$39,171.004.6% on first $10,220; 6.15% on next $10,220; 6.5% on next $18,731.00$2,316.17
Ohio Income$5,829.000.743% on first $5,000; 1.486% on next $829.00$49.47
Cincinnai Income$5,829.002.1%$122.41

And this would be his total income without the NHL stint:
Now let us evaluate his total tax burden and income:
Total Gross Salary$45,000.00
US Federal Income$11,250.00
US Social Security + Medicare$3,442.50
Canadian Federal Income$7,032.10
Sasketchewan Provincal$5,042.92
Wisconsin Income$2,316.17
Ohio Income$49.47
Cincinnai Income$122.41
Total Net Salary$15,744.43
Notice a difference? Ian McKenzie would make a larger net salary at the end of the season if he doesn't play in Nashville, even with a lower gross salary.

Here's the actual numbers:
 Gross SalaryNet Salary
With NHL recall$49,714.90$12,300.01
Without NHL recall$45,000,000$15,744.43
Difference+$4,714.90-$3,444.42
So despite having a gross income of roughly $4,700 more if he plays two games in the NHL, his net income will be roughly $3,400 LESS because of the Tennessee 'jock tax'.

Keep in mind this case study was done using an actual player in the Predators system. Theoretically a player in this circumstance could be earning an AHL salary as low as the minimum, which is $36,500. A player on an ELC would earn between $36,500 and $67,500 in the AHL under the current CBA.

Please note that I'm no tax expert so I'm sure there are additional taxes I may not have accounted for or tax agreements that I am not taking into account. This would obviously change to some extent if the case study player were from another country such as Sweden, Finland, USA, Russia, etc. I'm also not sure if the taxable income is the pre-escrow or post-escrow number so that could also change.
Minor nit - there are deductions and offsets for taxes paid to other jurisdictions.

All or part of the taxes paid to Canada, Sask, Wisc, Tenn, etc can be deducted on his US Federal Income Tax.

Also (although this would apply to Rafalski, not McKenzie), normally, IIRC a person who pays out of state (non-resident) income tax can also take a credit in that amount off his regular (resident) state income tax.

This was one of the things that Rafalski was complaining about - since Tennesee's "Jock Tax" is not an income tax, it does not qualify as an offset on his Michigan state income tax.

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03-29-2010, 02:16 PM
  #47
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That is messed up. If I was a player, I would just refuse to play in that state.

If a guy like Crosby or Ovechkin boycotts a game there because of the tax you can be sure it would get a ton of attention.

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03-29-2010, 03:32 PM
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That is messed up. If I was a player, I would just refuse to play in that state.

If a guy like Crosby or Ovechkin boycotts a game there because of the tax you can be sure it would get a ton of attention.
Yeah, negative attention...I imagine they are considering better alternatives.

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03-29-2010, 03:45 PM
  #49
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What a joke. I'm sorry, but I'm so glad I live in Canada where we only get income tax, property tax and GST and PST. If I were an NHLer I'd be royally po'd.

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03-29-2010, 03:49 PM
  #50
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Originally Posted by Dado View Post
How are these "wild taxes"?

They've been around for a long time, many many states/countries have them, they aren't fundamentally any different than the way other entertainers (eg, touring bands, or actors coming to town to make a movie) are taxed.

And yes, these taxes do exist in Canada, covering US athletes/entertainers crossing the border.
I'd say anything that even approaches a 100% tax on an out-of-state player is "wild".
"Covering US athletes/entertainers crossing the border"....a tad different. When the Manitoba Moose come play the Hamilton Bulldogs...does Ontario tax the crap out of them for it?
Crossing international borders is quite a bit different compared to provincial/state borders.

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