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  1. #1
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    Should the NBA Abolish the Luxery Tax? JA Adande says "Yes"

    Here's a more serious proposal: abolish the luxury tax. It was an artificial creation in the first place, implemented to keep big spenders from overwhelming the league, designed in part because the owners couldn't be counted on to exercise fiscal responsibility all on their own. Now that the real world has encroached on the NBA the desire to save money, they can keep payrolls down naturally. Teams won't spend what they literally don't have. No need to add punitive taxes that have become the driving force behind the trade market.

    It's one thing to create cap space. At least that brings the hope of signing better players one day. There's no excitement generated by slipping below the tax threshold, unless you're one of those people who gets thrills from reading a spreadsheet file.

    Without the luxury tax teams wouldn't feel compelled to cut their payroll to a target number. There might not be the urgency to dump salaries ... and we could get back to arguing over who got the best players in a trade.

    http://sports.espn.go.com/nba/dailyd...ge=dime-090219

  2. #2
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    I agree the Luxury Tax is ridiculous and needs to go. Watching a trade deadline when Raef Lafrenze is more coveted than Amare Stoudamire it's becoming pathetic.

  3. #3
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    I think they should raise it a little bit over the next year to help some of the owners out in these tough financial times, but no way should it be abolished.

  4. #4
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    no no no no no no no

    I don't wanna see the NY yankees in basketball.
    For not honoring a sig bet I now own YEDB90

  5. #5
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    Quote Originally Posted by RaysFan View Post
    I think they should raise it a little bit over the next year to help some of the owners out in these tough financial times, but no way should it be abolished.
    I heard rumors on a local radio show that they are thinking about lowering it in order for teams to retain season ticket holders.


    Warriors come out and Ta-ank.

  6. #6
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    "Without the luxury tax teams wouldn't feel compelled to cut their payroll to a target number."

    Isn't that the point of the luxury tax in the first place? Argument just seems redundant. Luxury tax makes teams who use money frivolously pay for it. Keeps owners honest. It also helps the small market teams as they can cash in a cheque at the end of the season because of certain owners spending.

    In my opinion the luxury tax is necessary for the smaller market teams in the league to compete.

    The case of the Hornets interests me as they are a smaller market team who is losing their chance to compete because of the luxury tax. Now this year New Orleans is in fact under the luxury tax, but next year when Paul's new salary kicks in, they are over the tax.

    Based on: http://www.shamsports.com/content/pa...es/hornets.jsp
    http://hoopshype.com/salaries/new_orleans.htm

    Next year is when they have a problem. Now I could look through their roster and see where they may have overpaid (Stojakavic, Peterson, Daniels). But they also have David West at a bargain making 9 million.

    For me it comes down to this. When things go very well for a small market team like it has for New Orleans, teams should be allowed to make a mistake or two with salaries and still be able to compete against the teams with more money to spend (like Dallas) and not get penalized by the luxury tax. However, without a luxury tax, teams with bottomless pocketbooks can continue to spend more money and slowing working their way far above the salary cap and skewing the equality between teams in the league. As it stands, I think that is the greater of two evils for the league to deal with and with the rules in place as they are, New Orleans should be spending money more wisely.

    The system shouldn't force New Orleans to do that, but as long as there are Mark Cuban's in the league it will be the reality. For most smaller market teams, I think the luxury tax rule is beneficial. At least with the rules clearly stated, owners and GM's can point the fingers at themselves for throwing money around the way they do.

  7. #7
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    The NBA lux tax is the model example that other leagues should follow.

    Any F1 fans in here know what its like when one or two teams have ridiculous budgets while every other team is almost losing money trying to keep up.

  8. #8
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    His argument for abolishing the tax is that teams are trying to get under it anyway? So if it's there, and everyone's under it, then why get rid of it? It's a safeguard against big markets completely dominating smaller markets (and they still do somewhat, even with the tax). His argument for teams "self regulating" is exactly what got the USA in the ridiculous financial crisis it's in right now. Banks were supposed to regulate themselves, so were car manufacturers, and the housing industry. Look where it got us.

    The only way the NBA should abolish the luxury tax would be to have a hard salary cap, which would make the tax redundant.

    Edit: I really think JA Adande just likes to hear himself talk, and see his name show up on Google.

  9. #9
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    Keep the tax. Some owners, like Dolan, are richer than others and can afford to spend however bad the economy is.

    And interestingly, the league is planning on lowering the cap.

    The Grand Chessboard

  10. #10
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    Quote Originally Posted by pebloemer View Post
    "Without the luxury tax teams wouldn't feel compelled to cut their payroll to a target number."

    Isn't that the point of the luxury tax in the first place?
    Argument just seems redundant. Luxury tax makes teams who use money frivolously pay for it. Keeps owners honest. It also helps the small market teams as they can cash in a cheque at the end of the season because of certain owners spending.

    In my opinion the luxury tax is necessary for the smaller market teams in the league to compete.
    Beat me to it. Great post

  11. #11
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    Very true, that luxury tax check at the end of the season is probably the difference between a small team making money and losing money.

  12. #12
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    Basketball, Baseball, and all major sports should do what the NFL has done. No luxury tax, profit sharing, and a HARD CAP. Look how competitive the NFL is and the parity (for the most part) That's fun to watch. Now if only the NFL could figure out the rookie payscale...LOL!
    Last edited by tkshy; 02-19-2009 at 02:04 PM.

  13. #13
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    Quote Originally Posted by tkshy View Post
    Basketball, Baseball, and all major sports should do what the NFL has done. No luxury tax, profit sharing, and a HARD CAP. Look how competitive the NFL is and the parody (for the most part) That's fun to watch. Now if only the NFL could figure out the rookie payscale...LOL!
    Sorry, not trying to be the grammar police, but that's one of the best vocabulary mix-ups I've ever seen. --- I'm not joking, it's awesome.

    (parity)

  14. #14
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    as much as i would love if the luxury tax was lifted. It just simply wouldnt be fair. I'm a bulls fan and we would have so much money (3rd largest market) compared to say OKC or memphis. It just wouldnt provide equal opportunity, could you imagine what Mark Cuban would do if there was no tax? lol he'd put an all star in every position.

  15. #15
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    they should keep the luxury threshold but raise it by a lot. you don't want the Knicks just signing all the superstars like the Yankees do.

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