Professional hockey players trying to save their big paychecks from the taxman have turned in overwhelming numbers to teams in cities and states where the tax rate is low, according to an unusual new report on the National Hockey League.
The report issued Monday found that 54 percent of free agents and 60 percent of players with no-trade clauses in their contracts choose teams located in lower tax cities.
The report, jointly produced by the Washington-based Americans for Tax Reform and the Canadian Taxpayers Federation, said that by shifting to lower tax cities in free agency, players saved $4 million in taxes.
“Successful hockey players can choose their team in free agency and thus, their hometown for tax purposes. So can millions of Americans and Canadians who move from high tax areas to low tax areas. Better than any poll, this tells us what taxpayers want: Lower taxes and less government,” said Grover Norquist, president of Americans for Tax Reform.
The report plays off the popularity of the NHL as its season begins to highlight areas in North America where taxes are low and that may be attractive to Canadians and Americans as they consider moving.
Interestingly, the NHL players appear to be following a migration to low-tax areas just like Americans, suggests the report.
Two players in the report saved nearly $1 million in taxes. “Jaromir Jagr will save $460,106 with his move from New Jersey to Florida. Artem Anisimov will save $392,322 with his move from Columbus to Chicago,” said the report.
“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 significant disparities in tax rates can penalize players when they move between teams.”
— The American teams with no state income tax have the lowest tax rates in the NHL. In 2015 Dallas Stars, Florida Panthers, Nashville Predators and Tampa Bay Lightning are tied for first at 40.6%.
— The Montreal Canadiens have the highest tax rate at 54.2%, beating out the California teams.
— The Anaheim Ducks, Los Angeles Kings and San Jose Sharks are tied for second-last at 53.1%.
— Having a no-trade contract clause gives players the power to avoid being sent to high tax jurisdictions. Tyler Myers saved the most, at $474,146, by moving from Buffalo to Winnipeg.Players without no-trade clauses could suffer a big take-home pay cut when traded to a high-tax jurisdiction. Sergei Gonchar’s move from Dallas to Montreal would have cost him an annualized $664,241 in taxes, although he won’t be playing there next year. Keith Yandle’s trade from Arizona to the Rangers will cost him an extra $364,964.
— 60% of players with some kind of no-trade clause who changed teams picked teams with lower taxes.
— Out of the 116 UFAs signing with a new team since July 1, 54% went to cities where they will pay less tax. Players moving to lower-tax jurisdictions will save more than $4 million.
— From 2012 to 2013, 16,207 people making more than $200,000 lowered their taxes by moving to Florida, and another 7,315 to Texas. High-tax jurisdictions are losing those high-income individuals, with New York losing 14,756 in one year.
— In the last 10 years 266,520 people moved from the high-tax provinces east of Manitoba to live somewhere else in Canada, and a lot of them moved to low-tax Alberta, which had net interprovincial migration of 248,197.
Paul Bedard, the Washington Examiner’s “Washington Secrets” columnist, can be contacted at [email protected].
