There’s a lot to think about when considering a move to a new city for work and taxes should be near the top of that list. No other profession better illustrates the affect of regional taxes on take-home pay than professional hockey. A new study by the Canadian Taxpayers Federation (CTF) and Americans for Tax Reform (ATR) found that NHLers sporting Calgary Flames and Edmonton Oilers jerseys have the biggest tax advantage in the league whereas Montreal is the most expensive city to play the game.
Just how much money are players leaving on the ice when they switch teams? Winger PA Parenteau will pay an additional $349,535 in taxes after being traded to the Canadiens, moving from Colorado’s 46 per cent tax rate to Quebec’s 54 per cent rate.
Conversely, former Ottawa Senators centre Jason Spezza can expect to see tax savings of $394,732 after being traded to the Dallas Stars, moving from Ontario’s 49 per cent rate to 41 per cent in Texas.
“The numbers don’t lie; NHL players take a financial hit to play in certain jurisdictions,” said paper author and CTF research director Jeff Bowes. “Obviously, there are other factors at play besides taxes, but the fact remains that disparities in tax rates leave some teams at a major disadvantage.”
Calgary and Edmonton share the top spot for most favourable tax city in 2014, up from fifth place in 2012. Florida, Tampa Bay, Dallas and Nashville fell from the top spot in 2012 to third best locations in 2014 to play from an income tax standpoint. Vancouver is seventh, Winnipeg 12th, Ottawa and Toronto at 18th and Montreal in 30th.
Higher taxes drive talent to other teams in lower tax states and provinces, the study authors suggested. In fact, 57% of unrestricted free agents who moved teams in the 2014 off season went to teams with lower taxes.
“NHL players are just one example of highly skilled workers who have a choice of where to work,” said CTF federal director Aaron Wudrick. “The same principles apply far beyond professional athletes, but also for doctors, engineers and CEOs of major companies. If high tax rates make it more difficult to attract free agents in the NHL, it’s not a stretch to believe it’s also be hard to attract other highly skilled workers.”