Newsguyone said:
I still haven't seen one person explain why "cost-certainty" is justifiable. I still haven't seen one person explain how 100 percent Luxury Tax at $40 Million WON'T cut salaries.
Since the players are not proposing and almost certainly will not offer a 100 percent luxury tax, it's kind of a moot discussion, but we'll have it anyhow.
A 100 percent luxury tax won't necessarily cut salaries for a couple reasons.
First, it makes the assumption teams like the Rangers, Flyers, Maple Leafs, Red Wings won't be willing to incur luxury tax costs., a la the NY Yankees and BoSox. If the Maple Leafs, for example, are able to turn a substantial profit with a $65 million payroll, why do you assume they wouldn't be willing to keep that payroll, profit a little less and/or pass along the additional costs to the customers (who, in Toronto, are all-to-willing to pay it)?
Second, if the system passes along tax revenues to smaller-market teams to boost their payrolls, it creates an inflationary system by which all salaries will rise. It will flood the player market with funds that would otherwise not exist, driving up the salary for every player. If, for example, Nashville receives an additional $10 million a year for payroll and requires Nashville to spend that money, players who would otherwise would receive $1 million (just throwing out a number) will now command $1.25 million because they know the team has the money. That, in turn, forces Phoenix, Atlanta and every other team in the league to increase salaries for similarly skilled players.
Essentially, at its best a luxury tax doesn't necessarily reduce salaries so much as it shifts revenue from one team to another in hopes it will help the latter compete better. And that's in an ideal situation. The only luxury tax in existence has proved to be far less than ideal.
Beyond that, you're wrong to assume the entire purpose of a cap is cutting salaries. It is also designed to restore a level of competitive balance. That level exists in the NFL and NBA (hmmm ... I wonder why) and not the NHL and MLB.