Luxury tax

[Alex Wang <awang@mit.edu>]

I'm glad that the players have put forth some sort of salary reduction
proposal on the table because it tells us what range the negotiations for
one aspect of the new bargaining agreement (max salaries) will likely take 
place in. The owners began with a proposal of $10 million max salary per 
player, and the players have counterproposed a luxury tax of 50% of salaries
over $18 million. Of course both sides are posturing; even "fiscally
responsible" owners such as Gaston are willing to pay around $14 million per 
year for a truly valuable player, while the unions' limit of $18 million would 
restrict so few players as to be virtually useless in the short term. The 
arbitrator's decision will dictate which direction this negotation heads.
Definitely the idea has possibilites with the right numbers attached and in
combination with other controls like a team soft cap and team luxury tax. How
about a 50% marginal tax for salaries above $10M, 100% above $14M? Would this
sufficiently deter the super-rich teams?

Alex