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Post by Commish_Ron on Feb 28, 2020 20:50:18 GMT -5
I am open to increasing this in the interest of marginally shrinking that gap in the budgets. I don’t think the teams on top should view this as anything more than some extra challenge and maybe it helps teams on the bottom turn things around quicker. Again, like I said above, I don’t think this is a problem that needs fixed, just an opportunity to make a great league a little better.
Choices are:
1) Increase tax rate of the Luxury Tax to 35%. This would leave our current luxury tax in place but increase the tax rate from 20% to 35%. This would be implemented in 5% increments over the next 3 seasons.
2) Move to income sharing and increase. Next season we would total the percentage of the current luxury tax rate, calculate the percentage of income that would result in the same revenue sharing amount, and increase that percentage in 5% increments over the next 3 season.
Yes votes for these two options must combine for 75% of the vote for a change to be made. If that occurs, the option with the most votes will be implemented.
Proxy votes will be case to move to income sharing and increase.
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Post by BlueJaysGM_Fin on Feb 29, 2020 12:41:53 GMT -5
Can I ask something to understand this, so my vote counts toward what is best for the league?
In looking at StatsPlus (2054 year), there are 10 of the 32 teams in the league paying revenue sharing dollars ranging from $24.8 million down to $2.1 million. This is currently tied to the luxury tax tax rate of 20%, correct?
My question is what does the numbers look like if we move to the 'Move to Income Sharing and increase' idea that is proposed? *Will more teams pay into it? *What will the $ range look like between top paying teams and lower paying teams?
I am only asking these questions to help me understand if moving to this option would benefit the small market teams. I support helping the league in the most possible way. Just trying to understand what the proposed idea would look like.
Thanks!
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Post by sansterre - Milwaukee Brewers on Feb 29, 2020 13:01:47 GMT -5
It's a question of where the rate gets set. We can set the % to match what is currently being done with the luxury tax, or turn it higher. The only major difference is that the tax functions based on revenue, not payroll.
As I recall, a 25% revenue sharing rate bumps the lowest revenue teams to $100M (and that's adjusting for the lost luxury tax money), but that's only my recollection.
The math is actually pretty easy. I figure that question 1 is "Do we?" and question 2 is "Okay, how much?" and then question 3 is "How slowly do we transition it?"
Okay. I've run the numbers with 25% and last year's revenue and luxury tax numbers. It's short of $100M for the lowest, but it's worth an extra $13M to the lowest teams, bringing them up to $95M revenue. The best two teams would drop between $20M and $25M, but by my calculations only six teams lose more than $10M.
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Post by sansterre - Milwaukee Brewers on Feb 29, 2020 15:09:09 GMT -5
Whether or not you favor any sort of "leveling the playing field", you should definitely favor swapping to Revenue Sharing as opposed to the Luxury Tax.
One taxes revenue, one taxes payroll. It's pretty obvious which is the real indicator of the financial advantages a team has. It's a little unreasonable that high-revenue teams can cut their payroll such that they're actually getting financial aid from the league for their "low payroll". And it's equally unreasonable that teams that are spending 95% of their revenue on their payroll (because they're all in) are getting punished by the tax more than teams that make more money but put less toward payroll.
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Post by Sean_RedsGM on Mar 1, 2020 16:58:23 GMT -5
Whether or not you favor any sort of "leveling the playing field", you should definitely favor swapping to Revenue Sharing as opposed to the Luxury Tax. One taxes revenue, one taxes payroll. It's pretty obvious which is the real indicator of the financial advantages a team has. It's a little unreasonable that high-revenue teams can cut their payroll such that they're actually getting financial aid from the league for their "low payroll". And it's equally unreasonable that teams that are spending 95% of their revenue on their payroll (because they're all in) are getting punished by the tax more than teams that make more money but put less toward payroll. Then we really should have multiple polls right?
I'm voting no, but if I'm getting stuck between the two then yeah, I'd vote to go with revenue model.
UPDATED: I'm actually voting for the revenue tax rather than the current luxury tax option. Curious why there would be opposition to this actually.
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Post by sansterre - Milwaukee Brewers on Mar 2, 2020 10:49:48 GMT -5
From the numbers I've run, the closest "Percent of Revenue" that matches the luxury tax amount (the amount being transferred from the top to the bottom) is about 12%.
Despite being neutral in the aggregate, it will skew revenue notably; at least one team will lose $10M in revenue (relative to the state of things with the luxury tax) and at least one team will gain $10M in revenue.
At 17% (12% plus 5%), we actually see no team gain $10M from the status quo, and only two teams lose $10M plus. The lowest two teams gain about $7M and their revenue goes to an estimated $95M.
At 22%, five teams lose $10M-plus and four teams gain $10M-plus, with the lowest two teams gaining about $11M to get to $98.5M.
At 27%, seven teams lose $10M-plus and five teams gain $10M-plus.
The following numbers do use the 2053 playoff income as part of the calculation:
PBL Current: Top 5 revenues are 305, 289, 271, 239, 223. Bottom 5 revenues are 87, 88, 92, 101, 108. 17%: Top 5 revenues are 297, 285, 263, 220, 219. Bottom 5 revenues are 95, 95, 98, 106, 112. 22%: Top 5 revenues are 290, 279, 258, 217, 216. Bottom 5 revenues are 98, 99, 102, 109, 115. 27%: Top 5 revenues are 283, 273, 253, 215, 213. Bottom 5 revenues are 102, 103, 105, 112, 117.
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Post by Commish_Ron on Mar 2, 2020 21:01:14 GMT -5
Technically there are enough proxy votes to pass this, but since it was only 1 vote away from being blocked I am not going to use 9 votes to pass it. We will have no changes right now to the revenue sharing.
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Post by MetDaMeats on Mar 2, 2020 21:04:52 GMT -5
Technically there are enough proxy votes to pass this, but since it was only 1 vote away from being blocked I am not going to use 9 votes to pass it. We will have no changes right now to the revenue sharing. Hey Commish, I'd like to suggest an alternate poll over whether to switch from luxury tax to revenue sharing without the increase.
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Post by Commish_Ron on Mar 2, 2020 21:57:07 GMT -5
Technically there are enough proxy votes to pass this, but since it was only 1 vote away from being blocked I am not going to use 9 votes to pass it. We will have no changes right now to the revenue sharing. Hey Commish, I'd like to suggest an alternate poll over whether to switch from luxury tax to revenue sharing without the increase. That's already on the agenda for next off season.
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Post by sansterre - Milwaukee Brewers on Mar 3, 2020 8:53:44 GMT -5
I'd throw in the "allow full access to revenue" option and the "increase or eliminate max carryover limit" to be discussed next year as well. Probably are already on but still
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