NHL's favoritism against Canadian teams exposed by Montreal Canadiens forward

Montreal Canadiens forward Michael Pezzetta recently spoke on a hockey podcast about the financial realities of playing in a Canadian market, particularly regarding taxes.

NHL players across the league face a hefty tax burden each year. However, the tax rates vary significantly by location. For instance, players in Vancouver deal with higher taxes compared to their counterparts in Florida, where there is no state income tax. Consequently, Victor Hedman only pays federal taxes in the U.S., while Elias Pettersson pays taxes both federally and provincially in British Columbia.

According to Pezzetta, Montreal stands out as one of the least favorable places for NHL players due to its high tax rates. Quebec's provincial tax rate is the highest in Canada, reaching 25.75% on income over CAD 126,000. In contrast, California's top tax bracket is 12.3%, applied to incomes just below the USD 700,000 threshold.

Pezzetta highlighted that his first NHL paychecks had 54% of his income withheld due to Quebec's combined provincial and federal tax rates. This results in a significant effective tax rate for NHL players in Montreal. However, he noted that money placed in escrow is not taxable, which slightly reduces the effective tax rate. Additionally, the escrow rate fluctuates annually and has been decreasing as the league recovers from the COVID-19 pandemic.

While the tax burden is a reality in the NHL, it doesn't necessarily hinder teams in high-tax markets from competing. For instance, the San Jose Sharks were among the top teams for years before their rebuild. However, it is noteworthy that three of the last five Stanley Cup champions have come from Florida, where there are no state taxes.

Source: Markerzone
Montreal Canadiens forward exposes the NHL's bias against Canadian teams

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