Luxury Tax

[Commissioner Erick]

We didn't get much traction in the Luxury Tax thread so I wanted to bring it back. Original comments can be found by clicking through the link.

pinnaclebaseballassn.proboards.com/thread/120/luxury-tax


To summarize, right now the Luxury Tax works as the mechanism for Revenue setting, but is set at 70% over the league average. This basically keeps all but the top two teams from buying in. I think 120 or 125% of the league average is a more beneifical number. The revenue gets shared equally by the lowest spenders, which shouldn't be the case either, but is a game mechanism that can't be changed.

Aaron proposed a flat revenue tax where extra revenue gets taxed, not your payroll.

Does anyone have any thoughts?

[tigersgm_Steve]

My initial response to a flat revenue tax is no as it seems more punitive than strategic. Make a lot of money? You have to share it with those that are not good financial managers. But, I get what Aaron is trying to address.

I'm in one league that uses a financial cap. I didn't like it the first year but came to appreciate it a lot over time. Ours is $100M and you can't go over. What it does allow is the investment of revenue into player development/scouting. Player salaries are within reason and more players head to free agency because teams know they can sign them cheaper than extending them, which is not the case in leagues w/out caps.

The Luxury Tax is 'vague', or at least has that perception to me, because numbers are always changing.

[gmyankees]

My opinion is I'm for a hard salary cap that changes from year to year to adjust for inflating salaries league wide.

[Commissioner Erick]

lol we have very little consensus on this so far.