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Why the coronavirus pandemic should propel the NBA to suspend its luxury tax for the 2020-21 season

CBS Sports

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Article Summary:

For the sake of simplification, the cap line is typically set at around 43 percent of that income divided by 30 teams, while the tax line is usually around 53 percent divided by 30 teams. The penalties get worse the more a team spends, and those penalties grow even larger when a team has paid the tax either three years in a row or four of the past five. Normally half of that money is distributed among the teams that did not pay the tax, and as there are usually far more teams that didn’t pay it than did, there will almost always be heavy pressure on the league office to hand out the collected sum.

So far, the teams we’ve discussed have mostly come from big markets, and while relief efforts might seem like the unnecessary implementation of trickle-down economics, they aren’t the only teams in desperate need of a bailout.

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