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Old
08-16-2010, 05:56 PM
  #1
tinyzombies
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Taxes

I've read threads where guys said that taxes in such a high bracket don't really affect players' salaries, except in states where they have no income taxes like Florida, Texas, etc.

Now this quote from Cammy:

"If you look at the taxes, you can take a lot less money to play in Alberta, than to play in Montreal, Quebec or Ontario."

So, what is true?

http://www.montrealgazette.com/mobil...tml?id=3392088

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08-16-2010, 06:12 PM
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Max et Guillaume
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Yes it is. Depending on the province you're in, income above a certain level (i.e. 150K or so usually) will be at the highest bracket possible. So if you're making 6M playing in Alberta, anything above 127K will be taxed 29% at the Federal level and they have a flat tax rate of 10% at a provincial level. So $5.87M would be taxed at 39%, and only $127K would be at lower brackets.

That being said, there are a lot of way to minimize your "taxable income" with various deductions, but overall it will cost you more to play in Canada than in the US, Quebec especially, since it has the highest provincial income tax rate for people making a good money (a hockey player's marginal tax rate in Quebec will be 53% versus 39% in Alberta. at $6M per year, it represents $840K).

In the US, some states like Washington and Florida do not have any State income tax, but you still have a federal income tax that is at 35% if you make over $350K or so.


Last edited by Max et Guillaume: 08-16-2010 at 06:15 PM. Reason: Sorry initially misread OP's statement.
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08-16-2010, 06:13 PM
  #3
InglewoodJack
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It's true, but I strongly doubt that the players pay all of their taxes. At 52%, we wouldn't get a single player in the league. Yeah we have prestige, but prestige means nothing to someone like Cammy who (if he's going my the law) would be making a very humble 2.8 million dollars.

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08-16-2010, 06:15 PM
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92Rahman
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i got no clue on what u said but in simpler versions ... how much money does cammy make with his 6 mill here and how much would he make with his 6 mill in alberta ?

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08-16-2010, 06:17 PM
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Max et Guillaume
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IF Cammy applied NO deductions and his entire salary was considered "taxable income", he would pocket $840K more by playing in Calgary. Considering the cost of living is similar, it's $840K more...

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08-16-2010, 06:19 PM
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http://hfboards.com/showthread.php?t=798435

Pretty good thread on the matter.

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08-16-2010, 06:25 PM
  #7
Stjonnypopo
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Why do you think Montreal is close to the cap hit yet they don't have a superstar player commanding a superstar salary? It's because they have to overpay every single player to make it worth their while to stay in Montreal. If you're making 1M a season, do you want to clear 470K in Montreal or do you want to clear 600K playing in the states? Montreal has history going for them which is the only reason why people still sign there, if the Canadiens were as unpopular as the Panther or the Predators, nobody would sign there.

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08-16-2010, 07:21 PM
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Galchenyuk94
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Sucks for us

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Old
08-16-2010, 09:29 PM
  #9
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Quote:
Originally Posted by Max et Guillaume View Post
IF Cammy applied NO deductions and his entire salary was considered "taxable income", he would pocket $840K more by playing in Calgary. Considering the cost of living is similar, it's $840K more...
Having lived in both places, the cost of living is anything but similar: it is much higher in Calgary, even without PST. I would think it's at least 25% more expensive in Calgary.

http://www.canadaimmigrants.com/Montrealiving.asp

http://www.canadaimmigrants.com/Calgaryliving.asp

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08-16-2010, 09:34 PM
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Habs514
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Nick Kypreos said yesterday that if Malone got traded to Toronto for Kaberle that he would loose 1 million since in Florida there is no state tax.

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08-16-2010, 11:18 PM
  #11
VL55
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You know, cost of living doesn't means a whole lot to a millionaire.

Let's say it takes 300$ a month to feed a single man in Montréal and 600$ somewhere else... who cares? People who clear a monthly income in the low thousands, that's who! Not somone who grosses 500k a month. You'll never hear a multi millionaire say; ''Ooooh, the cost of living is so expensive in New York! Food, electricity, gas and other petty expenses represent 1.7% of my income instead of 0.94%! So unfair, I'm leaving this town!''

As for housing market, it might cost you more to own a house but you will also sell it for higher when you leave so it's no big deal either. Might even be an additional source of income if the market is that high. Most Luxury items can be shipped.

So.. yeah. Who cares about cost of living? Me! Hockey players, not so much.


PS: Don't most player have their pay deposited in a corporation and then use dividends to pay for living expenses (which of course are but a fraction of total yearly salary in most cases)? Corporation are taxed more heavily here than elsewhere too, but that stratagem would still lessen the impact betweem Quebec and US/Alberta. Anyone seen articles on the topic? Or did I imagine the whole thing and it's not even legal?


Last edited by VL55: 08-16-2010 at 11:27 PM.
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08-16-2010, 11:23 PM
  #12
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States with no taxes are at 35% marginal rate as that is the top federal rate. Alberta is 39%, 29% federal 10% Alberta flat tax. Ontario and Quebec are both around 50%. I believe BC is around there as well. I believe some cities in the states can have a tax but I don't know if there are any NHL cities involved. I know California has a high state tax for top earners plus a heavy sur tax for big earners of salary.

As per the idea that tax breaks like deductions make any significant difference they don't for athletes. Tax deduction are designed for the middle class. If you make $50k then being able to deduct $10,000 in a personal exemption makes a difference. If you make $6 million it doesn't mean anything. Methods of deferring or avoiding taxes if you make alot always involve people who don't get paid all in salary. Dividends, Capital Gains, leaving money in a corporate structure, deducting large business expenses don't work if you get paid in salary that is public published. Basically if the marginal rate is 50% these guys are paying close to that.

As for the no state taxes being a big advantage it is but if the Bush tax cuts get repealed then the marginal rate for all American based NHLers will jump quite a bit.

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08-16-2010, 11:24 PM
  #13
waffledave
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Quote:
Originally Posted by Hfboards2010 View Post
Having lived in both places, the cost of living is anything but similar: it is much higher in Calgary, even without PST. I would think it's at least 25% more expensive in Calgary.

http://www.canadaimmigrants.com/Montrealiving.asp

http://www.canadaimmigrants.com/Calgaryliving.asp
Cost of living makes virtually no difference at all if you're making millions of dollars.

Yes it's cheap to rent an apartment here. But Cammy isn't renting an apartment in Verdun anyways.

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08-16-2010, 11:25 PM
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tinyzombies
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Perhaps if the tax rate was lower, we would have gone for Getzlaf? Hmmm?

I'm assuming we are going for skill in the draft because we can't afford it on the market.

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Old
08-17-2010, 01:06 AM
  #15
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Quote:
Originally Posted by VL55 View Post
You know, cost of living doesn't means a whole lot to a millionaire.
Quote:
Originally Posted by waffledave View Post
Cost of living makes virtually no difference at all if you're making millions of dollars.
Makes me wonder why I even try. I am not making the argument that cost of living means anything to millionaires. I am making the argument that this is false:
"Considering the cost of living is similar, it's $840K more..."

And while I'm at it: about 1/3 to 1/2 of the players on most teams earn $1.5M or less. If I was planning my future based on a short/medium length NHL career, I know I would be much more "concerned" about taxes if I was making $1.5M vs $6M. Avaricious star players need not apply.

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08-17-2010, 01:26 AM
  #16
InglewoodJack
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Quote:
Originally Posted by waffledave View Post
Cost of living makes virtually no difference at all if you're making millions of dollars.

Yes it's cheap to rent an apartment here. But Cammy isn't renting an apartment in Verdun anyways.
http://www.crackshackormansion.com/

Think Burrows is living in a three story house sippin cristal?

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08-17-2010, 05:20 AM
  #17
WestIslander
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Here's what Cammalleri makes after taxes if he plays for:

Montreal
- $3,122,728

Calgary
- $3,673,198

Edmonton
- $3,673,198

Vancouver
- $3,396,912

Toronto
- $3,234,969

Ottawa
- $3,234,969

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08-17-2010, 08:21 AM
  #18
Joe Cole
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People who make a lot of income want to keep as much as they can, just like people who make more modest incomes. Anyone who has spent time with wealthy people would agree on that principle.

As far as trying to equate how much it costs to live and eat, the comparables are no where near correct. Someone who makes $50k may spend $300 a month to eat. But someone who makes $200k spends twice that amount, if not more. They do not buy flank steak, or possibly even cook at all.

A car may cost of $50k worker $500 a month. Someone who makes $200k spends at least twice that. Shelter, travel, entertainment... all of these can be had at many price points. The more money you make, the richer your friends, the higher up the scale you aim.

Bottom line, income tax matters.

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08-17-2010, 08:23 AM
  #19
King peZ
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Not that much of a difference...

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Old
08-17-2010, 08:23 AM
  #20
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Quote:
Originally Posted by Hfboards2010 View Post
Having lived in both places, the cost of living is anything but similar: it is much higher in Calgary, even without PST. I would think it's at least 25% more expensive in Calgary.

http://www.canadaimmigrants.com/Montrealiving.asp

http://www.canadaimmigrants.com/Calgaryliving.asp
Yeah I kind of lol'd when I read that. Naive Montrealer's thinking the cost of living out west is "similar". (No offense to the poster who said that but the cost of living out west is higher, noticeably)

Quote:
Originally Posted by waffledave View Post
Cost of living makes virtually no difference at all if you're making millions of dollars.

Yes it's cheap to rent an apartment here. But Cammy isn't renting an apartment in Verdun anyways.
Also a fairly good point, especially when you're making 850k more, I don't think you give a damn that your condo cost more money when you make 850k more. Plus you can always sell a condo.

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Old
08-17-2010, 08:29 AM
  #21
habsfan92
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I do not know if it is relevant to this discussion, but the players must also pay taxes while playing in the U.S. I have read an article that was written by a player, that basically stated that if Cammalleri played a road game in Nashville, he was taxed on the amount of income he earned by playing that one game-an entertainment tax. I don't think that that tax paid there is claimable on his IT return. The point of the article was basically that if players from another team travelled and played against Nashville more than 3 times or so, they are paying as much in tax as the Nashville players. Not really fair for visiting teams.

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Old
08-17-2010, 11:11 AM
  #22
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Originally Posted by habsfan92 View Post
I do not know if it is relevant to this discussion, but the players must also pay taxes while playing in the U.S.
It's colloquially called a "jock tax".

This is probably the article you are referring to:
"Red Wings' Brian Rafalski says Tennessee 'jock tax' too much"

Here is an article about the "jock tax" in Alberta and you can find more about the tax in the Alberta Personal Income Tax Act - Part 1.1 NHL Players Tax and NHL Tax Regulation

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