NBA teams established a new record for luxury tax penalties during the 2021/22 season, as seven clubs paid total tax payments exceeding $481MM, blowing away the previous single-year record of approximately $173MM. A year later, that record is on track to be shattered once again.
According to Eric Pincus of Sports Business Classroom, the nine teams that are currently over the luxury tax line are on track to pay more than $625MM in total tax penalties.
Even after the trade deadline has passed, projected tax bills remain fluid due to possible roster moves, suspensions, incentives, and a handful of other factors. For instance, the Nets‘ projected tax bill increased when they signed Nerlens Noel to a 10-day contract earlier this week, and it’ll climb even further if they bring back Noel on a second 10-day pact or a rest-of-season deal.
Still, the current numbers will likely end up being pretty close to the final numbers, and they’re already pretty staggering. As Pincus outlines, here are the current penalties for this season’s taxpayers:
- Golden State Warriors: $168.9MM
- Los Angeles Clippers: $140.3MM
- Milwaukee Bucks: $79.5MM
- Boston Celtics: $65.3MM
- Dallas Mavericks: $56.2MM
- Phoenix Suns: $53.4MM
- Los Angeles Lakers: $35.9MM
- Denver Nuggets: $14.2MM
- Brooklyn Nets: $11.8MM
As significant as the Warriors’ projected tax bill is, it still falls a little shy of the $170MM+ they paid last season en route to a championship. The Clippers’ and Bucks’ penalties will be substantially higher than they were a year ago though, and teams like the Celtics, Mavericks, and Suns will be on the hook for sizable bills after finishing last season out of the tax entirely.
It’s worth noting that the Nets, who paid a bill of nearly $98MM in 2022, were headed for a nine-figure penalty this year before last month’s Kevin Durant and Kyrie Irving trades, so their new projection looks pretty good by comparison.
According to Pincus, the NBA’s 21 non-taxpayers are presently on track to receive payments worth about $14.9MM, since 50% of the penalties in a given league year are redistributed to the teams that finished out of the tax.
The shares for non-taxpayers would have been higher, but the Sixers joined that club by sneaking under the tax line at the trade deadline, while teams that were dangerously close to that threshold – like the Hawks, Trail Blazers, and Heat – created some extra breathing room with their pre-deadline deals.
The luxury tax system is expected to be modified in the NBA’s new Collective Bargaining Agreement, so it will be interesting to see whether the record set this season for total tax payments ends up standing for a while.
This season, IMO
GMs race to the bottom
Warriors – pay huge tax to get worse
Draymond double overpaid
Poole triple overpaid
Both are turnover machines, not able to play offense and defense
GMs race to the top
Lakers- tax saving to acquire good young players
76ers – tax saving to get much better
Nets – tax saving for the future
Wait until green goes to the lakers and get way over paid more than he makes now.
The Lakers will have no cap Arc so unless he’s taking the MLE he wont be a Laker
Do you factor any of this stuff in before posting?
Draymond Green might be the most overated player I’ve ever seen. Warriors won 10 games all year with him playing every game 3 years ago. Only defense he plays is flopping and kicking opposing players in the groin. If Draymond was on say the Kings to start his career, he’d be working a 9-5 at McDonalds right now
nobody works banker hours at mickey dees.
Lakers tax planning 2023-24
Lakers have $44 million tax room
Players Pay Cut planning for 9 FAs (based on real value, not market value)
DLo $22 million
Reaves $12 million
Hachimura $10 million
dennis schroder $10 million
Gabrief $6 million
Brown Jr $4 million
Roster charge $6 million
Luxury tax $55 million
Getr rid of Bamba, Walker and others if they want market value contracts
There should be some level of tax discount for drafted players on 2nd, 3rd contracts. Drafting and developing should be rewarded not punished.
Tax for homegrown drafted players is stupid. If they changes the policy maybe team would draft better???
Not just homegrown players, should be any player that a team has Bird rights with.
Billionaires giving each other millions. Is this even news? It’s hilariously non important!
They should use the funds to pay back fans who couldn’t see a superstar play because DNP load management. Then we see how much they like this tax…smash like if you agree
And you will never see the Bulls on this list because Jerry Reinsdorf avoids paying a luxury tax like it was the Plague (see Chicago White Sox)
Brooklyn should’ve tried to move under the luxury tax to avoid repeat offender in the future (and get those 15 million as a bonus).
They only had to move off of 6,9 million in salary.
Trading Simmons would’ve been perfect but difficult as he has a negative value. Fournier + x, John Collins, Rozier or Hayward, McDermott & cap space or any of the guys that are now bought out seem like the only “overpriced contracts” they could’ve gotten in return or sent to a third team. Simmons could maybe regain some value on a team where there’s not that much pressure.
Mills and Harris seem like the likely candidates and were included in a Bleacher Report mock trade: Mills+Harris+Philly 1st rounder(top8) for McDermott and Collins.
Replacing Collins for Tre Jones and increasing the draft capital would’ve been great for Brooklyn. Question is if Tre Jones could’ve been available for the right price.
Other option would’ve been to trade Collins for something/someone else and get a guard on the buy-out market.
Anyway, that’s too late now.