Teams Projected To Be In The Tax

February 26 2013 at 8:43am CST By Luke Adams

On deadline day, the Warriors traded a pair of minimum-salary players, Jeremy Tyler and Charles Jenkins, for essentially nothing. Sixers GM Tony DiLeo confirmed that his team not only acquired Jenkins and put heavy protection on the second-round pick sent to the Warriors, but received an amount of cash from Golden State that more than covered the youngster's salary for the rest of the season. The specific details of the Hawks trade for Tyler aren't clear, but we can probably assume Golden State included a similar amount of cash there, and that Atlanta's second-rounder included similar protection.

For the Warriors, paying a little extra money now made more sense than paying the price later, as trading Jenkins and Tyler allowed the team to get below the tax threshold ($70,307,000) and avoid becoming a taxpayer. The moves will not only save the team from making a tax payment itself at year's end, but will allow the Warriors to receive a portion of the tax payments from the clubs above the threshold.

While the Warriors chose to avoid the tax, the Bulls resigned themselves to becoming a taxpayer for the first time rather than give up a future first-round pick to get below the line. A club like the Celtics also chose to remain marginally over the threshold, while others like the Heat, Nets, and Lakers remained significantly in the tax. Here are the clubs projected to be taxpayers this year, along with their current team salaries, which could rise if they make additional signings before season's end:

  • Los Angeles Lakers: $100,166,250
  • Miami Heat: $83,204,612
  • Brooklyn Nets: $83,147,981
  • New York Knicks: $80,165,743
  • Chicago Bulls: $74,061,031
  • Boston Celtics: $71,371,552

Of the six teams on this list, three of them – the Lakers, Heat, and Celtics – were also taxpayers last season, putting themselves in line for the repeater tax down the road. Teams that are in the tax for four of five seasons are subject to the repeater tax, so after being taxpayers for two consecutive years, the Lakers, Heat, and Celtics will have to stay out of the tax for two of the next three seasons to avoid paying the more punitive repeater penalty in 2016.

Storytellers Contracts was used in the creation of this post.

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