The Knicks paid over $45 million in luxury tax penalties the year this picture was taken (Getty Images)
The idea of a luxury tax to rein in excessive NBA spending was proposed during the extended 1998-99 NBA lockout. Players wanted to retain "Bird Rights," which allowed teams to go over the salary cap to re-sign players. With no real hard cap in place, the NBA responded by bargaining in a second soft cap of sorts with a luxury tax — a dollar for dollar penalty that would be distributed amongst all non-tax-paying teams at the end of the season, only if the NBA met certain income requirements. It was first instituted in 2000-01, though the NBA didn't meet those requirements, and the tax wasn't collected that year or in 2004-05.
With a new and more punitive luxury tax about to hit in a couple of years, the great Mark Deeks of ShamSports.com (and sometimes The Basketball Jones) has decided to pay tribute to the history of the dollar-for-dollar days, offering up his typically studied answer to the question, "who has paid the most tax?" Actually, we had more than one question heading into this reading, this answered just about all of them, and it's worth pointing out that if you're not using ShamSports as your go-to NBA salary guide and following Mark on Twitter, then you're missing out on quite a bit.
A list of the biggest offenders follows, after the jump.
1. New York Knicks -- $195,288,145
2. Dallas Mavericks -- $150,530,433
3. Portland Trail Blazers -- $89,052,474
4. Los Angeles Lakers -- $84,417,253
5. Boston Celtics -- $46,094,213
The list tails off after that, but not before $853,361,637 in combined tax penalties was doled out to that year's non-tax-paying teams, over a nine-season stretch.
Which teams haven't paid the tax? Well, if you've been reading us rant about the Chicago Bulls over the last few days, you'd be right in assuming that perhaps the NBA's most profitable team over this period has yet to pay the tax.
Charlotte, Golden State (another profitable franchise that routinely draws big crowds even during bad seasons), the Clippers (of course), New Orleans, Oklahoma City/Seattle, and Washington (a surprise, considering the massive contracts they handed out to Gilbert Arenas and Antawn Jamison a few years back) have all skirted the tax. Houston nearly made the list as well, but contributed about $750k to the NBA's annual pizza party in 2010-11.
Of course, we're not attempting to tell you that you have to spend your way towards a winner, as evidenced by New York's standing at the top of the list. The team has played in just 18 playoff games over this stretch, which is being charitable because we're including the five playoff games they worked up during the NBA's first potential tax year (that wasn't actually taxed) in 2000-01. Pit that in comparison to the second-ranked Dallas Mavericks, who have played 131 postseason contests (with the requisite increased exposure and income) during that stretch, while winning the NBA title in 2011.
There are some odd quirks, or quirky oddities, amongst Mark's findings.
Portland paid nearly $90 million in tax penalties during this run, but just over $80 million of that figure came in the tax's two first seasons, including a nearly $52 million figure in 2002-03 that remains the highest one-year tax penalty to date. The Blazers, you might recall, lost in the first round of the playoffs that year to Dallas. Minnesota came out of nowhere to spend over $23 million in tax penalties the first two seasons but has contributed less than a million in the years since. Detroit contributed less than a million in its one championship season in 2004, the team's only appearance, and San Antonio barely registers save for the year it paid nearly $9 million in 2009-10 (swept in the second round). The Nets haven't paid it since 2004 but figure to be deep into tax territory for years to come under newish owner Mikhail Prokhorov.
Also, the Chicago Bulls have never paid the luxury tax. Unbloodybelievable.
It was a good run, NBA teams. Now, let's see how you function once taxes hit even harder, starting in 2013-14.
(And thanks again to Mark Deeks, for all his continued work.)
- Sports & Recreation