Yahoo Sports Luxury tax 2023-24: How much is each team projected to spend?
The NBA had another record-breaking season in luxury tax distribution last year. Nine teams combined with $634.2 million in penalties in 2022-23, eclipsing the previous record $481 million paid by seven teams in 2021-22. This also continues a trend where luxury tax penalties have increased each season since 2019-20. That trend is about to end this season with total penalties expected to decline.
We now have a clearer picture of what this year’s total luxury tax distribution will be with the Damian Lillard and James Harden trade requests resolved. Eight teams are currently projected to spend a combined $517 million in tax penalties. This does not include the Los Angeles Lakers and New Orleans Pelicans, who are slightly over the tax and could easily get under with a small salary dump.
Here’s a breakdown of each taxpayer this season.
Golden State Warriors
Los Angeles Clippers
2023-24 Payroll: $196.5 million
2023-24 Luxury Tax Payment: $122.2 million
2023-24 Combined Payroll and Luxury Tax Payment: $318.7 million
The Clippers are finally in the repeater tax after three consecutive seasons deep in the luxury tax. They’ve spent $233 million in tax dollars in those years and are projected to spend another $130 million this season. Their penalties could exceed $200 million over the next few seasons once they presumably re-sign all of Kawhi Leonard, Paul George, and James Harden. Their tax projection will likely reach $130 million once they reach 15 players.
Milwaukee Bucks
2023-24 Payroll: $183.6 million
2023-24 Luxury Tax Payment: $58.2 million
2023-24 Combined Payroll and Luxury Tax Payment: $241.8 million
The Bucks have been one of the bigger tax spenders over the past two seasons as they’ve maximized their window around Giannis Antetokounmpo. They are set to continue spending now that they’re in the repeater tax and with Antetokounmpo and Damian Lillard locked up for the foreseeable future. Their projected tax penalty is expected to stay in its current range. If anything, it’s more likely to be reduced through a cost-saving trade than rise.
Phoenix Suns
2023-24 Payroll: $186.8 million
2023-24 Luxury Tax Payment: $50.7 million
2023-24 Combined Payroll and Luxury Tax Payment: $237.5 million
The Suns are set to be one of the bigger taxpayers over the next few seasons after mostly avoiding it over the past two decades. They spent $54 million last season and are currently projected to spend just over $50 million this year. Their payment next season should exceed $60 million with Devin Booker’s supermax extension set to kick in. If they keep the Big Three together past 2024-25, they will enter the repeater tax and could have tax payments exceeding $150 million.
Boston Celtics
2023-24 Payroll: $183.5 million
2023-24 Luxury Tax Payment: $39.1 million
2023-24 Combined Payroll and Luxury Tax Payment: $222.6 million
The Celtics are set to be taxpayers for the foreseeable future after signing Jaylen Brown to a supermax extension. Right now their tax payments are relatively modest but will skyrocket starting in 2025-26 when Jayson Tatum’s eventual supermax extension kicks in. That’s also when they will enter the repeater tax and rates increase for higher spenders. They could still raise their penalty this season if they utilize their $6.2 million trade exception, which could be used on another big man.
Miami Heat
2023-24 Payroll: $180 million
2023-24 Luxury Tax Payment: $29.4 million
2023-24 Combined Payroll and Luxury Tax Payment: $209.4 million
The Heat haven’t paid the tax since 2019-20 despite experiencing a lot of playoff success over the last three seasons. They kept their ability to go above the second tax apron in case they acquire a player like Damian Lillard or Bradley Beal, but couldn’t get a deal done. They currently project with a $30 million penalty and are off to a start that doesn’t justify that expense. If they cannot acquire an All-Star mid-season, they seem like a candidate to make a cost-cutting trade. They are $15.2 million above the tax line, so it will be challenging for them to get completely below.
Denver Nuggets
2023-24 Payroll: $177.9 million
2023-24 Luxury Tax Payment: $22.7 million
2023-24 Combined Payroll and Luxury Tax Payment: $200.6 million
The Nuggets have historically stayed out of the tax but are now willing to spend some as title contenders. They aren’t deep in the tax after spending $17.3 million last season and are projected to spend just a little more this season. They could make trades to improve the roster but can’t increase their payroll by more than $4.7 million since they’re hard-capped, which would cap their penalty to $36.2 million. It’s unrealistic for them to consider getting under the tax this season unless they part ways with a starter.
Philadelphia 76ers
2023-24 Payroll: $169.6 million
2023-24 Luxury Tax Payment: $6.4 million
2023-24 Combined Payroll and Luxury Tax Payment: $176 million
The Sixers are currently over the tax and they could duck it or go even higher. That all depends on if they’re able to swing a big trade for a player that could help them win a title this year. They could get linked to players such as Zach LaVine, Pascal Siakam, and OG Anunoby as we get closer to the trade deadline. If they can’t acquire anyone, they’ll probably look to get below the tax instead. They are $4.3 million above the tax threshold, making them a Danuel House salary dump away from ducking it completely.
Additional Information
NBA teams collectively spent $5.1 billion last season between payroll and luxury tax penalties. If this season’s tax projections hold up, that figure will reach $5.3 billion.
The following teams are slightly below the tax: Chicago Bulls ($1.7 million below), Cleveland Cavaliers ($752,133 below), Dallas Mavericks ($3.5 million below), Minnesota Timberwolves ($2.4 million below), New York Knicks ($2.8 million below), and Toronto Raptors ($3.2 million below). None of these teams are expected to be taxpayers this season, except maybe the Knicks if they can acquire an All-Star mid-season.
Based on the current projections, the 22 non-taxpaying teams would collect $11.8 million each from the distribution pool.
As of now, ten teams are projected to be taxpayers next season: the Boston Celtics, Dallas Mavericks, Denver Nuggets, Golden State Warriors, Los Angeles Clippers, Los Angeles Lakers, Memphis Grizzlies, Milwaukee Bucks, Minnesota Timberwolves, and Phoenix Suns.
