Are you also accounting for the fact teams in Canada pay American dollars but cost of living is with Canadian dollars?

You could also look at the team pays the sum of taxes based on the cap hit. The players pays the lowest tax state percentage to the team
That way the team takes the hit on taxes instead of the player
Toronto collects the taxes from the players based on Nashville tax collection bracket but pays the provincial taxes on that amount to the government.

I mean there’s always the option to not live in the city of the team you play for

That is a non factor here. This is solely based on income tax. It is also a double edged sword with cost of living as the Canadian dollar fluctuates in comparison to the American dollar. There are points where the Canadian dollar is .7 the American dollar which is great for the players but when it’s .83 the American dollar, it is worse for the player. It’s a factor for sure but not for this argument as it’s how much the player nets.

Ok? You would have to live in a different state or province to see that real difference in income tax most of the time. The calculator cap friendly has is based on living outside of the city for the cities where it is common for the players to live outside. It says in the description:

“ Residents:
All players are assumed to be residents of their local region
Washington: The majority of Capitals players reside in Virginia (where the practice facility is located) and are therefore considered Virginia residents for state and city taxes
Philadephia: The majority of Flyers players reside in New Jersey (where the practice facility is located) and are therefore considered New Jersey residents for state taxes
New York Islanders: The Islanders practice on Long Island. The players do not live in New York City and therefore are not subject to the NYC city tax rate
New York Rangers: The majority of Rangers players live outside of New York City and therefore by default we do not incorporate the NYC city tax rate”

Sure you could live outside but this calculator is based on the majority.

I think you overstate the tax issue. Just don’t think it’s as big a deal as you do but I’m all for the league looking into the ridiculous system they have in place now.
I do think salary cap needs to be adjusted to reflect team revenue.
It’s ridiculous and perverse that Leafs / Habs / Rangers / Bruins (rich teams) etc have to give money to poor teams (revenue sharing) but then they also have the same hard cap as teams that receive revenue sharing. I won’t name the teams that receive revenue sharing (league hides that info) but pretty easy to guess.
If you provide money money to revenue sharing, your cap should go up by some percentage (say 25-50 cents for every dollar you “share”). If you receive money from revenue sharing your cap goes down by same percentage (25-50 cents for every dollar you “take”).
League wants competitive balance - and I agree to an extent…but you can’t penalize teams with huge fan bases to reward teams with small fan bases. Makes no sense.
MLB, EPL, NBA all operate without a hard cap and are more successful. I don’t know enough about how nfl works.