Why is Golden State Warriors owner Joe Lacob complaining about paying taxes?
Golden State Warriors owner Joe Lacob has been very vocal about the NBA’s luxury tax, decrying it as “unfair” but don’t get out the violins just yet
The NBA’s luxury tax is meant to level the playing field. I don’t want to teach a granny to suck eggs, but that is the point of the system. Rather than institute a hard salary cap, the NBA has gone down the road of allowing owners to spend what they want to, but taxing any money spent over the threshold to redistribute it around the league’s less monied franchises.
The Golden State Warriors have gone all-in on spending big. They have turned a $450 million team into a $5.6 billion team in just over a decade, largely through spending their way to championships.
But by being consistently over the threshold, the Warriors fall into the repeat-offender column, which drives their tax into a higher bracket. All told, they are charged around $7 by the league for every dollar they spend on salaries.
The Warriors are expected to pay around $141 million in luxury tax for 2022, which, when combined with last year’s $170 million bill, sets them atop the lifetime tax of every other team in the NBA.
Owner Joe Lacob says that is inherently unfair. “The truth is, we’re only $40 million more than the luxury tax. Now, that’s not small, but it’s not a massive number. We’re $200 million over in total because most of that is this incredibly penal luxury tax. And what I consider to be unfair, and I’m going to say it on this podcast, and I hope it gets back to whoever is listening. Obviously, it’s self-serving for me to say this, but I think it’s a very unfair system because our team is built by…all top-eight players are all drafted by this team.”
You have to ride along with this train of thought to follow him here, but the main takeaway is that the tax is meant to be an “incredibly penal luxury tax” and the fact that he is complaining about it means that it is working as it should. Sorry Joe, but you are supposed to feel the pinch. That is what drives you to stay within the limits of the salary cap.
But before you go feeling too sorry for Lacob’s cries of poverty, consider that the league has a nine-year, $24 billion tv deal that will give each team in the region of $800 million, and is expected to triple when it is renegotiated in 2025. He can afford the tax.
Or he can play fair, stay within the cap limit, and watch all of those tax woes simply disappear.
When billionaires complain about taxes, that means the system is working exactly as it was designed to. The fact that they can rake in nine figures and have the cheek to ask for a bailout is offensive.