Jets players enjoy 11th lowest tax rate in NHL

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This article was published 19/11/2014 (3969 days ago), so information in it may no longer be current.

OTTAWA — Jets centre Mathieu Perreault will save $216,000 in taxes this year because he is playing for Winnipeg instead of the Anaheim Ducks, where he played last season.

On the flip side, Pierre-Alexandre Parenteau will see his tax bill rise $350,000 by going to the Montreal Canadiens from the Colorado Avalanche.

If taxes dictated which NHL teams had the best shot at winning the Stanley Cup, Winnipeg’s chances wouldn’t be half bad.

A Canadian Taxpayers Federation analysis of the taxes paid by NHL players in all 30 NHL cities shows the Winnipeg Jets in the top half of the pack, coming in 11th lowest out of the 30 teams.

The analysis, done by the CTF in conjunction with Americans for Tax Reform, was done mainly to highlight the impact tax rates could have when it comes to recruiting top talent, be it NHL stars or doctors and engineers.

“It’s just a fun way to talk about taxes,” said CTF national director Aaron Wudrick. He said tax rates aren’t always the most fascinating topic so including the NHL can help get people’s attention.

“We’re not promoting tax cuts for hockey players,” stressed Wudrick.

According to the CTF report, using 2013-14 NHL salaries and 2014 tax rates, the Jets players will pay 45.7 per cent of their salaries in taxes this year, the 11th lowest tax rate of the 30 teams. That includes both federal and provincial or state taxes, and city income taxes in the cities where that is applicable.

Based on the 2013-14 season team salary spending, Jets players collectively will pay $27.5 million in taxes, the 12th lowest amount of any team.

Calgary, at 38.1 per cent, and Edmonton, at 38.3 per cent, lead the field in terms of lowest tax rates. Montreal, at 53.9 per cent and Los Angeles, at 53 per cent, are highest.

Because the salaries of NHL players start at $550,000 a year and many players make seven-figure incomes, the difference in the amount of taxes paid in the various cities is significant.

The report points out the salary cap in the NHL is intended to put teams on a more level playing field but because the tax rates are so different, lower salaries can be offered by teams like Calgary, Edmonton and Florida, and still be competitive with offers from teams like Montreal, Los Angeles and San Jose.

The report notes more than half the free agents who traded teams last season ended up choosing a team where they would pay lower taxes.

While the report suggests perhaps fans should “take a break from blaming your team’s management and consider blaming high taxes for why your team

can’t seem to end that rut,” Wudrick acknowledges there is a flaw in that thinking.

That’s because the team with the highest tax rate (Montreal) was in first place as of Tuesday while one of the two teams with the lowest taxes (Edmonton) was in last place in its division and fourth from the bottom overall Tuesday.

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Last year, Montreal and its highly taxed players was the only Canadian team to make the playoffs. The Los Angeles Kings, which at 53 per cent are taxed only marginally less than Montreal, have won the Stanley Cup twice in the last three years.

Winnipeg Jets management chose not to comment on the report.

mia.rabson@freepress.mb.ca