Rockets owner calls luxury tax, repeater tax a ‘huge hindrance’
Houston Rockets owner Tilman Fertitta is the latest prominent personality that has taken a shot at the league’s salary cap policy. According to the 61-year-old billionaire, the implemented rules and regulations have held his team back, and has served as a huge obstacle for the Rockets.
Fertitta shared his thoughts on the matter when he recently addressed the media in a Rockets press conference.
Fertitta says the luxury tax and repeater tax is a huge hindrance but he’s here to win championships, and 5 or 10 million won’t stop him from doing so. If they weren’t winning and still paying taxes, he would go look for a new GM. pic.twitter.com/E0WsONVq2E
— Kelly Iko (@KellyIkoNBA) September 24, 2018
For the technical definitions of the terms at hand, we head to the ever-reliable CBA FAQ Blog.
“The luxury tax is a mechanism that helps control team spending… It is paid by high spending teams — those with a team salary exceeding a predetermined tax level. These teams pay a penalty for each dollar their team salary exceeds the tax level.”
As for the repeater tax, it literally taxes or penalizes repeat offenders. That is, if a certain team goes beyond the salary cap for a second (or more) succeeding year, then the said team will need to pay a repeater tax on top of the luxury tax.
Given how the Rockets have one of the most expensive payrolls in the league, they definitely qualify for the luxury tax as well as the repeater tax year after year.
While Fertitta does have a point here, it is worth noting that all teams — including the defending champions Golden State Warriors — live by this association-wide salary cap policy. It is indeed a hindrance, but one that has been put in place to supposedly even out the playing field for the entire league.