[Curtis]

Okay, can someone check me on this? When I pitched the luxury tax idea to Markus, the idea was that teams with payrolls over the league average would pay, and teams with payrolls under the league average would receive a subsidy, but it would be a proportionate subsidy. It sounds as though the tax pool is being divided equally between the below average teams, which makes no sense. Let me run some numbers for you:

If the tax is 50% on the amount in excess of the average (100/50, which is the example I gave Markus), and there is a four team league with payrolls of 10, 40, 50 and 100 million dollars, the average would be $50,000,000. One team would pay the luxury tax (the $100,000,000 team would pay $25,000,000), and two teams would receive subsidies. In my proportionate example the $10,000,000 team would receive $20,000,000 and the $40,000,000 team would receive $5,000,000, which in each case is half the difference between their payroll and the league average.

If equal subsidies were disbursed each team would receive $12,500,000 AND THAT WOULD RAISE THE $40,000,000 team ABOVE the $50,000,000 team! The $50,000,000 team gets penalized for being average? No sense at all. Using the proportionate system all teams would maintain their relative ranking; no team would ever get left behind, and that would be true regardless of the percentages chosen.

(Using the same four teams and a 120/20 split, the $100,000,000 teams is still the only payer, contributing $8,000,000. The $10,000,000 team receives $7,000,000 of that and the $40,000,000 team receives the other $1,000,000. {$100,000,000 minus $60,000,000 equals $40,000,000. $45,000,000 minus $10,000,000 equals $35,000,000 and $45,000,000 minus $40,000,000 equals $5,000,000. $35,000,000 to $5,000,000 is a 7:1 ratio, so $7,000,000 to $1,000,000.}

By the way, the idea of the AI teams not being able to carry much money forward could be construed as deriving from that same PM in which I pitched the luxury tax. My actual comment was that the money received by the recipients should have to be spent to increase the following year's payroll, not carried as a balance or quietly slipped into the owner's wallet. The purpose of the luxury tax was to increase the level of competitiveness, not to enrich skinflints.

I suggested that any tax money received that was not used to increase payroll in the following year should be forfeited to the commissioner, but acknowledged that that could be very difficult to enforce on non-AI teams. My assumption was that he'd just not bother trying to implement that aspect. Enforcing it just on the AI teams seems an unsatisfactory compromise.

After going through all of that, I don't use the luxury tax in version 9 (which is why I wasn't aware of how it had been implemented). I use revenue sharing, which I have set at 50%. In a couple of my corporate minor leagues I set it at 100%.