[Re-Signing] VGK Re-sign Noah Hanifin to 8 year deal ($7.35M AAV)

[Coconuts]

6 minutes ago, Alflives said:

Then buy Canadian made products. 

 

That's not necessarily even a simple thing to do for the average Canadian nowadays 

[HKSR]

4 minutes ago, Alflives said:

Then buy Canadian made products. 

That makes no sense whatsoever Alf.  A Canadian made product in Canada would probably cost a helluva lot more than a Cambodian or Chinese or Vietnamese made product.  Also, lemme know when you can buy a Canadian made car, computer, cell phone, etc.

Maybe a Canadian made house?  That'll be a lot cheaper than an American made house in Texas or Florida huh? 

[HKSR]

Just now, Coconuts said:

 

That's not necessarily even a simple thing to do for the average Canadian nowadays 

I can't even think of any Canadian made product that would be cheaper than a foreign counterpart lol

[Coconuts]

Just now, HKSR said:

I can't even think of any Canadian made product that would be cheaper than a foreign counterpart lol

 

Maple syrup..? Maybe? 

 

I dunno, there are folks on this site who'd certainly have better understandings of the matter, but doesn't Canada have infrastructure issues? It's been a long time since a lot of the things Canadians consume and utilize originated in Canada. Globalization, trade, and so on have affected that. As have multinational corporations and country based organizational monopolies like Bell. Hell, it's easy enough to dig and conclude that most places folks buy their food fall under the banner of a handful of large companies. 

 

It's easier to buy local for things like produce, liquor, and so on, tougher to do for other things. Countries import a lot of what the consume, and every country isn't an economic giant. And really, the average person who doesn't have a large amount of disposable income is probably going to opt for the more cost effective option most of the time, that's just the economic reality. 

[Bob Long]

10 minutes ago, HKSR said:

I can't even think of any Canadian made product that would be cheaper than a foreign counterpart lol

 

fuel, medication, many food items, we're pretty competitive on electronics pricing (tho not on cell plans), I'd say high end property is still a bit of a bargain compared to other places as well. 

[HKSR]

Just now, Bob Long said:

 

fuel, medication, many food items, we're pretty competitive on electronics pricing (tho not on cell plans), I'd say high end property is still a bit of a bargain compared to other places as well. 

Still nothing that would make up an exchange rate difference.

 

In general, a $1.00 USD item in the USA will very unlikely be cheaper than $1.30 CAD in Canada.

[Bob Long]

Just now, HKSR said:

Still nothing that would make up an exchange rate difference.

 

In general, a $1.00 USD item in the USA will very unlikely be cheaper than $1.30 CAD in Canada.

 

pricing is weird tho from country to country. Many items are "blind" - people don't really know why its priced how it is, so you do see pricing on the same stuff higher and lower in different places for no real reason other than the market will pay.

 

I do think being paid in US dollars would be a net benefit, if you're living here. How big? dunno, would have to make a list and go shopping. 

 

[HKSR]

2 minutes ago, Bob Long said:

 

pricing is weird tho from country to country. Many items are "blind" - people don't really know why its priced how it is, so you do see pricing on the same stuff higher and lower in different places for no real reason other than the market will pay.

 

I do think being paid in US dollars would be a net benefit, if you're living here. How big? dunno, would have to make a list and go shopping. 

 

I don't think so.  I look at it like this:

 

Canadian player makes $10M USD in Canada = $13M CAD after exchange.  Taxed at 50% = $6.5M CAD take home.

USA player makes $10M USD in USA.  Taxed at 36% = $6.4M USD take home.

 

Nearly identical take home pay, but then exchange rate comes into play. 

 

HIGHLY unlikely any significant item in Canada would be the same price as in the USA (ie. $1.00 CAD for item in Canada is also $1.00 USD in USA).

 

Definitely not fuel:  https://www.globalpetrolprices.com/gasoline_prices/

[Bob Long]

1 minute ago, HKSR said:

I don't think so.  I look at it like this:

 

Canadian player makes $10M USD in Canada = $13M CAD after exchange.  Taxed at 50% = $6.5M CAD take home.

USA player makes $10M USD in USA.  Taxed at 36% = $6.4M USD take home.

 

Nearly identical take home pay, but then exchange rate comes into play. 

 

HIGHLY unlikely any significant item in Canada would be the same price as in the USA (ie. $1.00 CAD for item in Canada is also $1.00 USD in USA).

 

Definitely not fuel:  https://www.globalpetrolprices.com/gasoline_prices/

 

I don't think its that simple tho, players have agencies that can find them all kinds of tax deferrals. 

[HKSR]

Just now, Bob Long said:

 

I don't think its that simple tho, players have agencies that can find them all kinds of tax deferrals. 

Yeah, I've gone down this path with other posters the past several months.  There are tools for tax, but it doesn't mean they pay the same tax rates as the low tax states do.  It narrows the different to maybe an 8 to 10% difference instead of the 13 to 15% difference.  It's also isolating the high tax guy from the low tax guy saying the low tax guy can't find similar tax deferrals or tools to lower their rates further.

 

Bottomline, there is a significant tax advantage for those guys that play in low tax states.  It's reflective of the contracts handed out across the league.  If it wasn't an issue, we wouldn't see evidence of it in practice.

[Elias Pettersson]

2 hours ago, HKSR said:

CLOSE... just the last part isn't quite right.  The actual tax rate in Canada IS the tax rates in Canada.  You don't get to cherry pick your tax rates.  If you are a Canadian citizen, you'll be paying your share of Canadian tax rates. 

 

https://fariscpa.com/reporting-foreign-income/

Right. Petey is paying taxes in Canada at his Canadian tax rates for his entire salary. He gets a foreign tax credit for the taxes he pays on his US tax return. So those taxes are offset and the net is zero. 
 

I believe what most players playing in Canada do if they don’t intend on living here after retirement is to set up an RCA account with the team. The team then transfers a portion of their salary into the RCA instead of paying it out as income. It’s technically similar to an RRSP. Then if the player moves back to Sweden and starts pulling the money out they will be taxed based on Swedish tax laws.  The withholding tax in Canada would be offset if the country that the player moves to has a tax treaty with Canada. 
 

With an RCA Petey could save up to $800k per year in Canadian taxes. So his tax rate would be similar to someone who is playing in Florida. 
 

This is why the tax savings are blown out of proportion with players playing in Canada. With a good accountant and a good tax savings plan Petry could be making the same after tax dollars as Nikita Kucherov. 

[HKSR]

1 minute ago, Elias Pettersson said:

Right. Petey is paying taxes in Canada at his Canadian tax rates for his entire salary. He gets a foreign tax credit for the taxes he pays on his US tax return. So those taxes are offset and the net is zero. 
 

I believe what most players playing in Canada do if they don’t intend on living here after retirement is to set up an RCA account with the team. The team then transfers a portion of their salary into the RCA instead of paying it out as income. It’s technically similar to an RRSP. Then if the player moves back to Sweden and starts pulling the money out they will be taxed based on Swedish tax laws.  The withholding tax in Canada would be offset if the country that the player moves to has a tax treaty with Canada. 
 

With an RCA Petey could save up to $800k per year in Canadian taxes. So his tax rate would be similar to someone who is playing in Florida. 
 

This is why the tax savings are blown out of proportion with players playing in Canada. With a good accountant and a good tax savings plan Petry could be making the same after tax dollars as Nikita Kucherov. 

I did the math along with other websites showing the calcs in detail.  The net savings with an RCA is about 5 to 10%.  It certainly doesn't place them on equal playing fields.  It just lessens the damage.  The difference in tax rates drops to about 8 to 10% instead of the insane 14 to 16% spread.

[Provost]

2 hours ago, HKSR said:

Except you're the one that doesn't understand how the tax system works and are wrong in this instance.

 

Jock tax is the tax levied in the state they play in, but that doesn't supercede the fact the CRA determines the tax you pay living in Canada on WORLDWIDE income.  You can't avoid the taxation rates in Canada unless you can prove your residency is not primarily in Canada.  There are a number of factors they look at (see link below).

 

The tax treaties allow for players that get taxed in those states to not be double taxed.  Doesn't mean they get to avoid pay the higher taxes in Canada. 

 

For example, if a Canadian NHL player that lives in Canada more than 50% of the year plays a game in Florida, they get taxed in Florida AND in Canada, but the treaty allows the withholding taxes in Florida to count against the taxes to be withheld in Canada.  The Canadian NHL player STILL PAYS Canadian taxes on the entire amount of income WORLDWIDE. 

 

https://fariscpa.com/reporting-foreign-income/

 

I didn’t say you got to avoid paying the higher tax.  I said you were wrong in saying you are taxed based on your home team where you reside.  That just simply isn’t true because you are literally taxed by those other jurisdictions.

 

You were arguing that someone else was wrong in saying your are taxed where you play.  That is exactly how you are taxed.  Your post I quoted admits you were wrong and changes what you said.  You just get to use that tax paid as a credit against your local tax so you aren’t double taxed.

 

As I explained a couple of times, it doesn’t bring down the tax you pay in a higher tax jurisdiction, but it brings up the tax you pay in a lower tax jurisdiction.  That makes the difference in tax paid much less regardless of where you play.  You have to also reverse your scenario as well and not ignore it.
 

Those calculators are just wrong as they are blunt tools using max marginal tax rates in each jurisdiction.  There are also tax avoidances strategies that exist or are more effective in high tax jurisdictions than there are in low tax jurisdictions.  That narrows the gap even more.

 

[Elias Pettersson]

51 minutes ago, HKSR said:

I did the math along with other websites showing the calcs in detail.  The net savings with an RCA is about 5 to 10%.  It certainly doesn't place them on equal playing fields.  It just lessens the damage.  The difference in tax rates drops to about 8 to 10% instead of the insane 14 to 16% spread.

If Petey is making  50% of his income in an RCA then his salary would be $5 million USD using a $10 million figure. So with the exchange rate he is making $6.5 million. After taxes he is making $3.25 million plus he has $5 million USD saved in his RCA. So his net income is $9.75 million CAD with $5 million USD deferred until retirement. 
 

If Kucherov is making $10 million USD and is paying 36% total taxes, then his net come is $6.4 million USD. Which is $8.32 million CAD. So Petey is saving more after tax dollars with his RCA. He doesn’t have access to $6.5 million of it, but it’s called tax deferral and he doesn’t need it right now so it’s irrelevant. So the RCA puts the Canadian players on par or better than the US players. So having said that, Kucherov could also have deferred tax planning available, so most likely he is still better off. So in the end if you hire a good accountant you will always be better off playing in Florida. 
 

This is why Ohtani deferred most of his income until after his contract is over. That way he can fuck off to Florida and pay minimal Florida state taxes on most of his income when he receives it in retirement versus paying those high California taxes now. 

Edited April 12 by Elias Pettersson

[HKSR]

7 minutes ago, Provost said:

I didn’t say you got to avoid paying the higher tax.  I said you were wrong in saying you are taxed based on your home team where you reside.  That just simply isn’t true because you are literally taxed by those other jurisdictions.

 

You were arguing that someone else was wrong in saying your are taxed where you play.  That is exactly how you are taxed.  Your post I quoted admits you were wrong and changes what you said.  You just get to use that tax paid as a credit against your local tax so you aren’t double taxed.

 

As I explained a couple of times, it doesn’t bring down the tax you pay in a higher tax jurisdiction, but it brings up the tax you pay in a lower tax jurisdiction.  That makes the difference in tax paid much less regardless of where you play.  You have to also reverse your scenario as well and not ignore it.
 

Those calculators are just wrong as they are blunt tools using max marginal tax rates in each jurisdiction.  There are also tax avoidances strategies that exist or are more effective in high tax jurisdictions than there are in low tax jurisdictions.  That narrows the gap even more.

 

You are taxed BOTH where you play, AND you are taxed on that same income where you reside.  That's the double taxation piece. 

 

If Canadian player plays a game in Florida, they get taxed in Canada AND they get taxed for it in Florida.  Only difference is, there are tax treaties to make sure that player doesn't need to pay the Florida tax as they are already being taxed in Canada.

 

I don't think you understand the reciprocal tax system for Canada and USA.  In both countries, you are taxed on worldwide income.  You are then ALSO taxed in the jurisdictions you play in, but because of the treaties in place, you don't pay taxes on those because your income is already included in your reporting to the CRA/IRS. 

As in Canada, in the USA, you report ALL worldwide income on your tax returns: 

"You are subject to tax on worldwide income from all sources and must report all taxable income and pay taxes according to the Internal Revenue Code."

https://www.irs.gov/individuals/international-taxpayers/us-citizens-and-resident-aliens-abroad

 

Tax avoidance strategies are available for all jurisdictions lmao.  You make it sound like only people that live in high tax jurisdictions can get tax breaks through appropriate tax planning. 

[HKSR]

3 minutes ago, Elias Pettersson said:

If Petey is making  50% of his income in an RCA then his salary would be $5 million USD using a $10 million figure. So with the exchange rate he is making $6.5 million. After taxes he is making $3.25 million plus he has $5 million USD saved in his RCA. So his net income is $9.75 million CAD with $5 million USD deferred until retirement. 
 

If Kucherov is making $10 million USD and is paying 36% total taxes, then his net come is $6.4 million USD. Which is $8.32 million CAD. So Petey is saving more after tax dollars with his RCA. He doesn’t have access to $6.5 million of it, but it’s called tax deferral and he doesn’t need it right now so it’s irrelevant. So the RCA puts the Canadian players on par or better than the US players. So having said that, Kucherov could also have deferred tax planning available, so most likely he is still better off. So in the end if you hire a good accountant you will always be better off playing in Florida. 
 

This is why Ohtani deferred most of his income until after his contract is over. That way he can fuck off to Florida and pay minimal Florida state taxes on most of his income when he received it in retirement. 

Ugh, I'm not gonna go and try to find those articles from the last time I went through this with some posters on here.  There were real examples provided and it worked out to about a 5 to 10% reduction in overall taxes paid.  Brought the taxes in high tax areas to 45% or so.  RCAs don't eliminate the tax differences completely. 

[Elias Pettersson]

13 minutes ago, HKSR said:

Ugh, I'm not gonna go and try to find those articles from the last time I went through this with some posters on here.  There were real examples provided and it worked out to about a 5 to 10% reduction in overall taxes paid.  Brought the taxes in high tax areas to 45% or so.  RCAs don't eliminate the tax differences completely. 

It depends how much you put into the RCA. If you put 50% of your income as my example showed then there is definitely a significant savings for a player in Canada. The problem with the RCA is that similar to an RRSP there is only so much you can put in there to claim “it’s for retirement”.  If you put too much in there then the CRA will treat it as part of an employee benefit plan, whereby the CRA will start taxing the withdrawals at the players marginal tax rate. 
 

You were probably just using a lower figure for contributions into the RCA to get your numbers. To be honest I don’t think Petey could get away with putting $5 million into an RCA. There is probably a cap that accountants use. 

Edited April 12 by Elias Pettersson

[MeanSeanBean]

21 hours ago, canucks curse said:

Isn’t Hanifin better than Hronek ?

They are close, but I'd say so. This is the contract Hronek can look at. If he wants 8, trade him.

[HKSR]

1 minute ago, Elias Pettersson said:

It depends how much you put into the RCA. If you put 50% of your income as my example showed then there is definitely a significant savings for a player in Canada. The problem with the RCA is that similar to an RRSP there is only so much you can put in there to claim “it’s for retirement”.  If you put too much in there then the CRA will treat it as part of an employee benefit plan, whereby the CRA will start taxing the withdrawals at the players marginal tax rate. 
 

You were probably just using a lower figure for contributions into the RCA to get your numbers. To be honest I don’t think Petey could get away with putting $5 million into an RCA. There is probably a cap that accountants use. 

Totally agree with you.  The number isn't static, it really depends on the situation.  The CRA determines the limit as "reasonable", so it's not defined.  I HIGHLY doubt the CRA would justify $5M per year as a reasonable amount to retire on lol.

 

The other piece that I find people struggle with is that they need to understand that low tax states also have tax savings strategies as well.  It's pretty ignorant to think that players in low tax states that pay 36% tax just sit on their hands and their accountants twiddle their thumbs and just take it up the butt from the IRS and pay 100% of the taxes they would normally owe.  Reality is those guys that are in 36% states likely get that number down to 30% or less.

 

The last thing is we just need to see the evidence of what reality is in the league.  Group up all the low tax states and group up all the high tax cities and compare the salaries.  It's pretty obvious there's a tax advantage.  Maybe not the 16% spread that some think it is, but even a 7 or 8% spread on a $50M contract is very significant.

[Artemus]

20 hours ago, Coconuts said:

 

That depends on whether he wants to use his leverage or not. Hronek is in the scenario Hanifin was the season before last, a D in the last season of being an RFA. The difference is that Hanifin was signed whereas Hronek is a pending RFA with only one RFA year remaining. 

 

He could just take his qualifying offer, which would walk him right to UFA. He's not a young RFA. 

 

Hronek also has other leverage. If the Canucks want to compete going forward he's the in-house devil they know, there's no guarantee that they'd get a player who'd fit as well if they were to trade him, particularly if they were looking to bring a younger player or two back in return. 

 

Hronek also controls his destiny to a degree in any trade, because teams aren't going to trade for him unless he's willing to sign an extension, which would likely eliminate some interested parties and narrow the list of potential trade destinations. 

 

The Canucks will be buying UFA years the same way Vegas did, but while Hronek can't simply choose to walk, he does have an out if he wants to get paid more than the Canucks are willing to offer. 

 

I don't think it'll come to that, but I do think there's a good chance his deal comes in a bit higher than Hanifin's. 

 

 

Yes, he could just accept his "Qualifying Offer" which would leave his salary for next season at $4.4 M and would take him to UFA status.

 

More likely, I think, is that he would choose to go the "Arbitration Route" as he does have arbitration rights. This arbitrated salary would, in all likelihood, be in the neighbourhood of Hanifin and Toews salaries. His salary for next year would then include a nice bump and would also take him to UFA status.

So there would be very little financial cost for FH not signing long term, unless he gets his asking price of $8 M+ this summer.

 

The only down side to this strategy would be if FH gets injured next year or if he has a statistically poor year.

 

 

[Coconuts]

Just now, Artemus said:

 

 

Yes, he could just accept his "Qualifying Offer" which would leave his salary for next season at $4.4 M and would take him to UFA status.

 

More likely, I think, is that he would choose to go the "Arbitration Route" as he does have arbitration rights. This arbitrated salary would, in all likelihood, be in the neighbourhood of Hanifin and Toews salaries. His salary for next year would then include a nice bump and would also take him to UFA status.

So there would be very little financial cost for FH not signing long term, unless he gets his asking price of $8 M+ this summer.

 

The only down side to this strategy would be if FH gets injured next year or if he has a statistically poor year.

 

 

 

The QO offer isn't something I've ever thought as a likely option, but arbitration could absolutely walk him to UFA. He'd be free to get what he wants via the UFA market after that, and given he'd be a prime aged top 4RD he wouldn't have any shortage of suitors. 

[Artemus]

14 hours ago, Crabcakes said:

Hanifin is a little better but is left handed and the contract was UFA

 

Hronek has 1 year RFA and is right handed

 

I think we see a larger difference between left and right handers on the free agent market as opposed to re-signing because it depends more on scarcity.  Look at the Myers over pay 6 years ago for example.  This is not an option for Hronek.  The number of UFA years in the contract will make a difference.  The difficulty the Canucks have had finding right hand D may play into the new contract.  All in all, I think we see Hronek signing at about the same AAV if they don't end up in arbitration.

 

 

Don't want to be overly pedantic but just a small correction.

Benning actually signed Tyler Myers to a 5 year contract.

 

 

[LillStrimma]

22 hours ago, Bob Long said:

 

I'd be surprised to see him get more than Hanafin. Arbitration won't give him more, thats for sure. This could be a catalyst to get a deal done soon with Fil. 

 

Well, Hronek has played at 0,5ppg pace his whole career in NHL. 
Hanifin just has his last three years doing that. 
Hronek is RHD and almost one year younger. 
Normally he is a mill more expensive than Hanifin.

[Bob Long]

32 minutes ago, LillStrimma said:

Well, Hronek has played at 0,5ppg pace his whole career in NHL. 
Hanifin just has his last three years doing that. 
Hronek is RHD and almost one year younger. 
Normally he is a mill more expensive than Hanifin.

 

Hanafin has better numbers, and is bigger. 

 

[JeremyCuddles]

As riveting as all this tax talk is, the reason they could trade for Hanifin in the first place is already back and practising with Vegas. If you sent your thoughts and prayers to the Stone family. Good job. He might be healed and ready to go by game 1, it's a true miracle. The 100mil dollar roster. Nothing nefarious about it.