The Effect of the New Luxury Tax

I'm sure by now, everyone here has heard (repeatedly) about how there's going to be a new luxury tax, about how it's going to be more "restrictive," how teams are going to be dying to shed salary, and how the Suns and their vaunted "flexibility" are going to be able to take advantage of this.

And I'm sure that we've also seen the Lakers and Nets flout all this, taking on millions of new dollars in contracts pegging them well into the luxury tax.

And that leads me to a question - WHO WILL THE LUXURY TAX REALLY AFFECT? I mean, clearly, it isn't the big market big spending teams that were meant to be pinned down.

The answer seems to be that it's mostly going to affect those teams which aren't big-market, huge-income teams, who have been spending like they were big-markets.

Below, see a table of the various NBA teams, and their salary from last year's season. I've bolded those teams that appear to me to be spending beyond their means:



LA Lakers ~ 95.3
Orlando Magic ~ 89.9
Dallas Mavericks ~ 85.8
Boston Celtics ~ 83.3
Denver Nuggets ~ 83.0
Houston Rockets ~ 72.7
Utah Jazz ~ 71.1
Philadelphia 76ers ~ 69.4
Atlanta Hawks ~ 69.1
New Orleans Hornets ~ 68.9
Memphis Grizzlies ~ 67.8
Milwaukee Bucks ~ 67.7
Portland Blazers ~ 67.5
San Antonio Spurs ~ 64.9
Detroit Pistons ~ 64.7
Golden State Warriors ~ 64.6
Indiana Pacers ~ 64.4
Charlotte Bobcats ~ 61.1
New Jersey Nets ~ 57.0
Phoenix Suns ~ 55.4
Miami Heat ~ 54.4
Washington Wizards ~ 52.7
Cleveland Cavaliers ~ 51.3
OKC Thunder ~ 50.3
Toronto Raptors ~ 49.4
New York Knicks ~ 47.2
LA Clippers ~ 47.0
Chicago Bulls ~ 46.7
Sacramento Kings ~ 39.0
Minnesota T-Wolves ~ 37.6

Essentially, the NBA has eliminated it’s middle class of teams. You’re now either a big-market big-spending winning team, or you’re the Washington Generals.

Orlando has already brought their salary situation under control through the Dwight Howard trade. Houston has traded most of their players, many for draft picks, and reconstituted themselves as a team that promises to play 3 power forwards at a time. New Orleans traded two rotation players for Rashard Lewis and then bought him out. The Hawks already traded away JJ. That just leaves Denver, Utah, and maybe the Grizzlies, as teams that will be looking to shed salary.

So far Denver has showed no sign of cutting costs, signing JaVale McGee to $44M, resigning Andre Miller, and acquiring Andre Iguodala via trade.

The only salary-strapped teams left, with players worth acquiring are the Jazz and Grizzlies, with the players to acquire probably being Gay or Millsap.

The only question left now is which version of the Washington Generals you want to root for?

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