Author Topic: Celtics Hub article on cap options and tax concerns  (Read 6409 times)

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Celtics Hub article on cap options and tax concerns
« on: May 29, 2017, 08:05:24 PM »

Offline tazzmaniac

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Good article breaking down options for getting to MAX and future tax implications.  Didn't realize the tax was so harsh. 

http://www.celticshub.com/2017/05/26/looking-forward-celtics-future/ 


Re: Celtics Hub article on cap options and tax concerns
« Reply #1 on: May 29, 2017, 08:21:04 PM »

Offline Cman

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Good article breaking down options for getting to MAX and future tax implications.  Didn't realize the tax was so harsh. 

http://www.celticshub.com/2017/05/26/looking-forward-celtics-future/

This is a fantastic article. Among the excellent points all us armchair GMs need to keep in mind are:

(1) Some hard choices will need to be made about who on the current roster will be let go in order to make room for a Max FA (assuming Cs are going that route).

(2) Irrespective of (1) some hard choices will have to be made--we can't keep everyone and extend everyone in 1, 2, 3 years without major, major luxury tax implications.
Celtics fan for life.

Re: Celtics Hub article on cap options and tax concerns
« Reply #2 on: May 29, 2017, 09:19:32 PM »

Offline Chris22

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Fultz, Brown, Hayward, Horford, and George.
That I what I would shoot for.

Re: Celtics Hub article on cap options and tax concerns
« Reply #3 on: May 29, 2017, 09:25:51 PM »

Offline tazzmaniac

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Fultz, Brown, Hayward, Horford, and George.
That I what I would shoot for.
How are you getting George?  What do you have on the bench? 


Re: Celtics Hub article on cap options and tax concerns
« Reply #4 on: May 29, 2017, 09:26:42 PM »

Offline keevsnick

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Good article breaking down options for getting to MAX and future tax implications.  Didn't realize the tax was so harsh. 

http://www.celticshub.com/2017/05/26/looking-forward-celtics-future/

Yep, for those who don't realize its now an escalating tax, no longer a 1 for 1 dollar tax. Every five million you are over the tax line incurs increasingly stiffer penalties. The first 20 million over would incur a tax bill of 45 million dollars (as opposed to 20 million under old cba).

Re: Celtics Hub article on cap options and tax concerns
« Reply #5 on: May 29, 2017, 09:27:52 PM »

Offline jambr380

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TP for posting the article.

Some of us have been screaming about the potential luxury tax implications that loom on the horizon. I wish I had the time and patience to gain more knowledge in this area, but it is great that this particular article goes into specifics about just how horrific the tax bill could be in the future. I particularly liked this snippet:

Quote
This spiraling tax problem is why I don’t believe the franchise can reasonably add Hayward and Butler or George. The assets are still there to put together a trade package, but a team with an extended Thomas, Hayward, Horford, and (let’s just pick) Jimmy Butler would have you near the luxury tax for just those four players in 2019-20. The following season you could remove Al Horford but you need to replace him and fill out ten other roster spots, at least.

It would be wonderful to put together a team of IT/Horford/Hayward/George, but unlike the superstar rosters of Cle and GS, all of these guys would be on new max scale contracts. That is why in a couple of years there will be parity once again in the NBA when all of the players on GS and CLE will need to be PAID.

Many people think that ownership will be willing to go into the luxury tax to field a contender, which is absolutely true. I just don't think they realize that # could reach $165M above the 2019-20 salary cap.

Re: Celtics Hub article on cap options and tax concerns
« Reply #6 on: May 29, 2017, 09:44:52 PM »

Offline JOMVP

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Those tax considerations are literally out of control. If anyone needs the situation put into perspective, read that article rather than just looking at our comments. It almost makes it a foregone conclusion in my mind that Avery is gone, which stinks because I really love him as a player. Unless they go the route of getting rid of Jae and replace him with Hayward and then decide to pay Bradley over Smart in the coming year. Which I guess is an option, but Smart will probably cost considerably less and you don't lose anything on defense but Bradley is clearly an upgrade offensively. The idea is though, that Fultz would take over Bradley's spot at the 2 and become the most dominant force we've ever witnessed in the NBA.

These tax concerns are exactly why I think Ainge and Co. are going to go after Hayward and then build through the draft after that. Those rookie controlled salaries will be a god send in years 3 and 4.

Re: Celtics Hub article on cap options and tax concerns
« Reply #7 on: May 29, 2017, 09:50:33 PM »

Offline Granath

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TP for the article. This should be stickied at the top of this forum since there are a great deal of people here who need to better understand it before they make more (absurd) trade proposals.

This is one of the reasons why Danny hasn't made the big deal. He knows there's one cap bullet left in his gun and after that things will be very, very tight. He'll be able to go over to resign IT and then that's about it. I'm not so sure IT will get $30m a year because his role is specific to this team and I don't believe other teams will value him as highly. Remember that he got benched as a 20ppg scorer because his defense was so bad. You can bet your ass that other GMs certainly will.

But whether it's $30m or $25m for IT the effect is still the same. There's not a lot of wiggle room once that last bullet is fired. Danny has this laid out nicely. Horford drops off when Jaylen becomes a RFA. If we make a deal this offseason or extend IT, you can bet their deal expires when Fultz/Yabu/Zizic are due. It's set up quite nicely for the future but one bad deal could make this whole thing fall apart and that's why I believe he's being so cautious. He simply can't afford to take on a bad contract or a bad fit until/unless Jaylen, Fultz or some other guy comes on the scene as a true superstar.

It also shows how [dang] smart Danny's been in acquiring and keeping all of these picks. Making just a handful of the silly deals proposed here would have handfcuffed this team and destroyed it before it has a chance to really develop into something truly special.
Jaylen Brown will be an All Star in the next 5 years.

Re: Celtics Hub article on cap options and tax concerns
« Reply #8 on: May 29, 2017, 09:51:46 PM »

Offline jambr380

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Those tax considerations are literally out of control. If anyone needs the situation put into perspective, read that article rather than just looking at our comments. It almost makes it a foregone conclusion in my mind that Avery is gone, which stinks because I really love him as a player. Unless they go the route of getting rid of Jae and replace him with Hayward and then decide to pay Bradley over Smart in the coming year. Which I guess is an option, but Smart will probably cost considerably less and you don't lose anything on defense but Bradley is clearly an upgrade offensively. The idea is though, that Fultz would take over Bradley's spot at the 2 and become the most dominant force we've ever witnessed in the NBA.

These tax concerns are exactly why I think Ainge and Co. are going to go after Hayward and then build through the draft after that. Those rookie controlled salaries will be a god send in years 3 and 4.

Yeah, I am not sure if we can realistically keep KO, either. If Jerebko is willing to sign to something similar to what he is making now ($5M/yr), then he has to be a real consideration over KO. As the article lays out very well, it would be a lot more than the $10M/yr extra that KO would be making over JJ.

Luxury tax = super-scary!

Re: Celtics Hub article on cap options and tax concerns
« Reply #9 on: May 29, 2017, 09:54:32 PM »

Offline Chris22

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Fultz, Brown, Hayward, Horford, and George.
That I what I would shoot for.
How are you getting George?  What do you have on the bench?

Free agency next year.

Re: Celtics Hub article on cap options and tax concerns
« Reply #10 on: May 29, 2017, 10:04:09 PM »

Offline CelticSooner

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Feels like option 5 is the plan going into next season with Hayward being the top target via free agency.

Re: Celtics Hub article on cap options and tax concerns
« Reply #11 on: May 29, 2017, 11:17:14 PM »

Offline tazzmaniac

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Thank goodness we're not Portland.  They're already at nearly 140M for next season without their 3 1st rounders.  The following 2 seasons they are close to luxury tax without nearly a full roster.  Seems like they're going to have to give up 1st rounders to dump bad contracts or trade McCollum.  The Nets tried to get Crabbe but the Blazers matched.  Now they could say we'll take Crabbe but we want a 1st rounder too.

 

Re: Celtics Hub article on cap options and tax concerns
« Reply #12 on: May 29, 2017, 11:54:25 PM »

Offline jpotter33

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Thank goodness we're not Portland.  They're already at nearly 140M for next season without their 3 1st rounders.  The following 2 seasons they are close to luxury tax without nearly a full roster.  Seems like they're going to have to give up 1st rounders to dump bad contracts or trade McCollum.  The Nets tried to get Crabbe but the Blazers matched.  Now they could say we'll take Crabbe but we want a 1st rounder too.

Yeah, there were rumblings that McCollum would be gone this summer if they didn't make the playoffs, because the owners weren't willing to pay that much money for a lottery team. The addition of Nurkic and actually making the playoffs, even the sweep, might've changed their tune, though.

Re: Celtics Hub article on cap options and tax concerns
« Reply #13 on: May 30, 2017, 12:01:50 AM »

Offline ETNCeltics

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Thanks for article.

It puts in perspective the IT/PG/Horford/Hayward dream is simply not feasible cap-wise.

Re: Celtics Hub article on cap options and tax concerns
« Reply #14 on: May 30, 2017, 04:20:25 AM »

Offline TheSundanceKid

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Fultz, Brown, Hayward, Horford, and George.
That I what I would shoot for.
How are you getting George?  What do you have on the bench?

Free agency next year.
If you sign Hayward I'm pretty sure that's impossible. Even if you let IT, Bradley and Smart all walk