by Vasashi17 on Wed Feb 27, 2013 3:52 pm
Incremental Tax Rates for non-repeat offenders (starts to apply next season)
$0-$5M = $1.50-for-$1
$5M-$10M = $1.75-for-$1
$10M-$15M = $2.50-for-$1
$15M-$20M = $3.25-for-$1
$20M-$25M = $3.75-for-$1
$25M-$30M = $4.25-for-$1
$30M-$35M = $4.75-for-$1
$35M-$40M = 5.25-for-$1
Incremental Tax Rates for repeat offenders (starts to apply for 2014/15 season)
$0-$5M = $2.50-for-$1
$5M-$10M = $2.75-for-$1
$10M-$15M = $3.50-for-$1
$15M-$20M = $4.25-for-$1
$20M-$25M = $4.75-for-$1
$25M-$30M = $5.25-for-$1
$30M-$35M = $5.75-for-$1
$35M-$40M = $6.25-for-$1
Starting the 2013/14 season, the new incremental tax rates will start applying, but for seasons 2011/12 and 2012/13, its still taxed as $1-for-$1. Also, the incremental tax rates for repeat tax payers will not apply till the 2014/15 season. The Lakers have payed the luxury tax for the 2011/12 season and will certainly pay for the 2012/13 season as well. From the looks of it, they will also be tax payers for the 2013/14 season and if they breach the tax apron for the 2014/15 season, they will be repeat offenders for the first 4 years of the new CBA contract and will have to pay the steeper more penalizing tax rates. By default, for the 2015/16 season, they will have to pay the steeper tax rates once again since they will be offenders 4 out of the last 5 years. So seeing how LA will be tax payers for the first 3 years of the new CBA, the summer of 2014 makes it that much more important for LA to avoid breaching the cap apron...and its entirely doable since Nash will be the only one with a contract for that season.
The tax apron is at about $70M this year and since the Lakers are at $100M (which is their tax figure, but with other cap holds and rolling payments, they're actually at $113M), they'll pay about $30M in taxes. Obviously if Pau were traded at the deadline, the Lakers would be saving about $19M in taxes and $38M total (if you take into account their cap hit along with the tax).
Lets say Dwight stays and signs the max 5 year deal totaling roughly $117M, in his first season under his new max deal (2013/14) he will make about $20.3M. If the rest of the core returns, that puts us at $100M already (with Kobe, Dwight, Pau and Nash making $80M of it). This accounts for Jamison, Clark, Morris, Ebanks and Sacre all expiring. We can bring back Jamison for the vet min again, but Clark is going to be looking for a raise (roughly 190% of his previous contract = $3.5M in 2013/14). So lets assume we round out the roster with a newly re-upped Jamison and Clark and possibly some randoms, we're looking at our cap being about $105M (which is a generous total...in actuality it could be more).
Since the repeater tax rates do not apply till 2014/15, assuming the tax apron will be at about $70M again, we'll be over the apron about $38M which leads to a tax breakdown of:
0-5M x 1.50 = $7.5M
5-10M x 1.75 = $8.75M
10-15M x 2.50 = $12.5M
15-20M x 3.25 = $16.25M
20-25M x 3.75 = $18.75M
25-30M x 4.25 = $21.25M
30-35M x 4.75 = $23.75M
------------------------------
= $108.75 (jeezuschriseee...that amount is more than our actual team salary)
No way do the Lakers want to pay that in taxes. Ideally, they want to just deal Pau and get back as little salary as possible. So for instance, lets say they amnesty Pau next season, that's roughly $20M shaven off the team cap leading to about $85M. That would put them roughly $15M over the apron and that would lead to $28.75M in taxes.
We have about $40M in expirings next year (Pau, Metta, Blake, Duhon, Meeks, Hill)...don't be surprised if we deal away most of that at .50 on the dollar. In fact, Cuban may have gotten part of it right with the amnesty...but it won't be Kobe...it might be THAT Spaniard.
Follow Club Lakers on Twitter
