Perhaps you've heard of a guy named Steven Stamkos? You know, the only superstar pending UFA in a class full of pretty decent also-rans who just so happen to never have scored 60 goals in a single NHL season like Stamkos has. Well to put it into simple terms he is going to get paid... a lot.
While tons of teams are going to be making offers to Stamkos if he makes it to the free agency wining & dining period prior to July 1st, the big money has it on Stamkos either staying with the team that’s gone to as far as the Eastern Conference Final two straight years or heading back to his spawning grounds in Toronto for oodles and oodles of noodles.
However, we're a Detroit blog and the Wings keep getting mentioned as a suitor, so we’re going to answer the question about why Stamkos would consider a contract in Detroit as well, and we’ll be doing it via everybody’s favorite avenue of discussion: income taxes!
One of the things that’s been paraded about most-heavily is that the State of Florida has no income tax. Combined with the fact that Tampa is the only team allowed to give Stamkos eight years, this explains why the Lightning would feel comfortable offering $8.5M in AAV to a guy who can easily command $10M on the open market.
When you factor in that Ontario does in fact have Canada’s version of a state income tax, and that even in Tampa, Stamkos would still have to pay federal taxes, the difference between what Stammer can take home in Tampa versus Toronto is fairly large, especially if Toronto can only give him seven years and force him to fend for himself as a 33-year old looking for his next deal. This is exactly why Toronto has to pay more.
However, while Detroit also suffers from the local tax issue forcing them to pay more to compete with a Tampa deal, the local tax rate added on for earning your dough in Detroit, Michigan is basically half of what you get hit for in Ontario.
With that in mind, I reached out and got help from Ben Glissman (@junkyard_god) to help me build a calculator which shows how the various tax rates can force vastly different AAVs for Stamkos to make the same salary after taxes in the three different cities.
But first, some disclaimers:
- This calculator was built for fun, using rates from tax calculators at Ernst & Young Canada and Smartasset.com.
- We trust Stamkos’ agent and accountant have a really good grasp on the truth of an incredibly complex real-life tax situation which takes into account a player making millions playing professional hockey in 30 cities across two countries, so they shouldn’t be using this to make decisions. If you also happen to be on the verge of making tens of millions in Tampa, Toronto, or Detroit, we suggest getting a tax advisor to tell you what it means rather than relying on this calculator.
- We have a fancy addition for the endorsement assumption as well! We don’t know for certain what players get paid for endorsements, but Forbes is pretty sure Sidney Crosby sets the gold standard at $4.5M
- You input the cap hit for an assumed 7-year Detroit deal and this calculator will tell you what he'd have to make in AAV to make the same amount of dollars on either a seven-year Toronto deal or an eight-year Tampa deal.
Stamkos Pay Calculator
|Detroit (7 Years)||Toronto Equivalent (7 Years)||Tampa Equivalent (8 Years)|
|Annual Net Salary|
|New Toronto AAV|
|Total Net Salary|