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Why we needed to dip below the luxury tax line

Discussion in 'Houston Rockets: Game Action & Roster Moves' started by BallaDoc, Feb 8, 2019.

  1. BallaDoc

    BallaDoc Member

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    I like the most of you was a little disappointed at what our haul looked like on trade deadline day. However, in retrospect I believe this was the correct move for roster construction for the future. And not only because Tilman is a perceived cheapo. First let’s revisit what the lux tax is, causes, and the benefits are to avoiding the repeated tax.

    1) Luxury tax and its implications

    With the last CBA thy changed the penalties on going over the lux tax. Before if you were at the luxury tax and added a guy for 5 million dollars you only had to pay an additional 5 million in tax. So a 5 million dollar signing cost 10 million. With the new rules you pay 150% tax on up to 5 million over. This gets progressively worse every 5 million over. This is why an Ariza 15 million dollar actually would cost us an additional 20 million in tax roughly.

    The repeater tax worsens this tax implication. If you are a repeat lux tax offender the tax goes from 150% up to 5 million over the tax to 250%!!!!

    I highly doubt any team is capable of making additional roster additions with this prohibitive tax except for GSW and that’s only because they can charge an assload for membership prices and recoup the cost. Houston cannot keep up with profit since we probably can’t charge similar exorbitant prices. And if we do you. Guys will complain about how empty the seats are.

    On top of the prohibitive cost of the repeater tax. Going over the luxury tax costs you from being able to use lux tax MLE vs non lux tax MLE

    Roughly non lux tax MLE 9 million
    Lux tax MLE 5 million.

    By keeping us under lux tax Morey gets an additional 4 million to spend his offseason to bolster the roster and then can use the lux tax MLe the following season. He can potentially add 2 significant roster pieces in he next 2 years for our window.

    Morey can still add to our roster and stay under the lux tax. He can add a Kieff or another big ( and I’d try to get them at multi year with our remaining MLE) and House to get a roster this year of

    Paul/Rivers
    Harden/Gordon
    Shumpert/house/Green
    Tucker/Kieff/Clark
    Capela/Manimal/Nene

    That team is astronomically deeper and better than last year.

    Morey then enters the offseason able to offer non lux tax MLE, Gordon and Nene expirings with 4 picks for third star, birds rights to Shump and can offer non birds to Manimal and Rivers and hopefully keep them.

    I honestly believe this was the right move in terms of ROSTER AND NOT JUST FINANCES.

    It is now documented that Tilman was pissed about a team backing out and the rumors from Iko and codman suggest we were trading knight for either Jam/Temple or Jam/Ellington which would’ve kept salary and been difficult to get under lux tax. I feel that Morey tried to get pieces got screwed but in the long run was able to unlock a better path to roster construction.
     
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  2. LUK3

    LUK3 Member

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  3. asianballa23

    asianballa23 Member

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    would we still be above Luxury tax line if we signed CP for ... say 30 mil a year instead of 40 plus??
     
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  4. snowconeman22

    snowconeman22 Member

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    Keep drinking that coolaid.

    Sure , this deadline could have been super prudent because tilman needs the flexibility to spend heavily the next three years .

    Alternatively , Tilman might be a cheap ass .

    I can buy that the course the rockets took is the measured and prudent one .

    But I can also buy that had tilman not told Morey that getting under the LT was a significant goal that DM could have done much more . This guy is one of the most aggressive GM's in all of sports . And his moves while having Harden playing at superhuman level and having a 33 year old star next to him amount to .... let's slightly upgrade 1 spot for a first and multiple 2nds ... and know that when we are healthy things will be fine ??

    By moving knight this year it helps us get under the LT . However it also prevents us from using his expiring as an asset next season . **** , knight could have been used in a sign and trade along with a pick or something like that to get a good player too .
     
  5. Carl Herrera

    Carl Herrera Member

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    Good thread, Tilman!
     
  6. BallaDoc

    BallaDoc Member

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    Probably not but that was the price for getting CP3. I’d say the mistake was not going all in that same summer and offering EGo Capela and picks for Paul George. Go all in when you’ve got the chance.
     
  7. Realjad

    Realjad Member

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    You don't seem to understand. You are writing this to a forum where the vast majority, if they could, would literally show up to the Toyota center with picket signs reading 'Fire James Frauden' if he happens to have an off night. Since most can't they would settle for a couple hundred threads of "I'm beginning to HATE James Frauden"

    You are talking to a bunch of animals that think Tilman is cheap because he is willing to go over the luxery tax, but not the repeater tax. ON AVERAGE you have 3-4 owners each year willing to pay the luxery tax for a season. Tilman is willing to pay the luxery tax whenever for 2 out of 3 seasons and yet 'he is cheap'.

    You are trying to explain logic to a group, if multiplied up to 7 billion, would undoubtedly make up the real version of the movie Idiocracy.

    While I appreciate your thread, I'm a bit disheartened you had to waste your time writing it.
     
    #7 Realjad, Feb 8, 2019
    Last edited: Feb 8, 2019
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  8. snowconeman22

    snowconeman22 Member

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    Can't prove he is willing if he hasn't done it .

    We wouldn't have paid the repeater tax this year . (Had we gone over)

    We wouldn't have paid the repeater tax next year (had we gone over )

    It would only be the year after that .... and that's IF we went over all three years
     
  9. Matt78777

    Matt78777 Member

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    Did this really need a new thread with our opinion? This has been hashed over to death in like, 5 other threads. The argument about luxury tax as too prohibitive, that's just like, your opinion man. With regard to getting Kief as a buyout, see Bimathug's analysis thread as to why that will be a hard sell. As to your argument that these were the best moves regardless of finances, what if I told you Rockets could have had the same team as the one you list above (minus Shumpert), except also with a first round draft pick, a long (but flawed) 3-D wing, a large salary to use as an expiring for trade matching purposes in the offseason, a second round draft pick, and $3.9M of the MLE to chase buyout guys? Oh yeah, that's who the Rockets were BEFORE they made any of these trades. I guess Shumpert truly is a difference maker?
     
  10. ISOBall

    ISOBall Member

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    Yea if the TC was filled with a few thousand @swyyyguy 's
     
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  11. napalm06

    napalm06 Huge Flopping Fan

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    The "Tilman is cheap" thing has become rallying cry for Clutchfans. There's no proof or logic to discuss there. People are making an inference that because we've made financial moves, Tilman doesn't care about winning and will ruin the team forever. Tilman has made cheap, but prudent moves, and any one of OUR (Clutchfans posters') prophecies about the future is solely based on how we connect the current dots without being in the context of Morey's actual meetings. We might as well argue about the future of a stock price, it will be just as productive. The only value in arguing about Tilman's cheapness is to say "I told you so" over and over IF the prophecy comes true, and I don't see the point in that.

    Your analysis about the tax tends to align with what a lot of more neutral parties are saying about the repeater tax and how it affects decision making. When Tilman said we needed to duck the tax in "one of the next 3 years", there's a message in there that people aren't getting. And it's a very different message to "I will not pay tax to win". Decision analysis is completely about managing risk. Calculated risk will be accepted if the expected reward is there. That's why CP3's contract happened (which everyone here now hates) - yet we turn around and stomp our feet to get Wes Mathews for double his contract value? Let's say we did that - and the next guy (better than Wes) becomes available this summer - then we all stomp our feet and complain about going into tax for a mediocre Mathews.

    The CBA and cap management has become more complex over time, so fans treat all financial machinations like an evil boogeyman that will go away if they yell about it over and over. If you're going to go into lux tax, position yourself to do it at the right time, in the best way possible. Fans will always say "THE RIGHT TIME IS NOW", but if you own a $2B business you are deeply planning your future pipeline of moves and acquisitions, you're not panicking and signing the first available guy you find in exchange for future danger. I'm not seeing a compelling argument that this team is falling apart and we know better than management on how to fix it.
     
    #11 napalm06, Feb 8, 2019
    Last edited: Feb 8, 2019
  12. BigBum

    BigBum Member

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    This thread is wrong if the expectation is to win Championships. You've got to compare to Cavs and GS 2015-2018

    Common sense: The bigger the payroll, the easier to make good trades.

    This thread is right if the expectation is to win only 2 rounds in the playoffs.
     
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  13. BallaDoc

    BallaDoc Member

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    Definitely agree about using Knight as an expiring. Look what he Mavs did with expirings this year. Giving away potential asset
    That’s a fair assessment about the repeater tax but I’d argue against ever being able to go below the moment a super max is on our books. Owners hardly go over the lux tax. Les would objectively disallow that. Why should we expect our owner to do so now while the repeater tax is a thing and barely any owner ever goes over. That’s foolhardy thinking. Knowing the repeater exists and going over is not an option. It’s better to get controllable assets and access to a better MLe in a year with the best FA then postpone.
     
  14. BallaDoc

    BallaDoc Member

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    Who’s to say we won’t win this year? Why downplay our team? We lost Luc and Ariza who are literal garbage this season and replaced them with Manimal rivers shump potential buyouts and potentially house. Our roster this year is deeper than last year. Just not as healthy. We’ve also afforded ourselves a better future with access to more options.

    Not to mention expiring nene and ego

    Knight would’ve never netted you a better package. He was not expiring. No one traded would’ve come this way except for role players that we can pick up on the buy out market. Morey made the right move
     
  15. Williamson

    Williamson JOSH CHRISTOPHER ONLY FAN

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    You know, it might be high time I change over and become a Tillman Only Fan. He's definitely the most hated within the Rockets organization right now.
     
    #15 Williamson, Feb 8, 2019
    Last edited: Feb 8, 2019
  16. napalm06

    napalm06 Huge Flopping Fan

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    Short-sighted view.

    The correct frame of reference for the luxury tax discussion is this:

    A. Continue with the team we had and/or add Mathews or similar to marginally increase chances of winning but guarantee heavy repeater tax on future moves, or
    B. Duck the tax without affecting the rotation whatsoever, and leave yourself a chance to make an even better signing(s) in the offseason with much more flexibility, believing that you've already maximized your chances of winning this year with the assets you have this year

    Which do you pick? This isn't an argument about choosing to win championships. It's an argument about the best way to position yourself for one. If you think this season is our best chance in Harden's window, I don't necessarily agree.
     
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  17. IvanLCPM

    IvanLCPM Member

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    A bit overboard, but accurate. lol
     
  18. jordnnnn

    jordnnnn Member

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    But as each year passes it becomes more and more difficult to be under with rising numbers of our core 3. Paul’s last year will likely be impossible to be under.
     
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  19. Slam Dunk

    Slam Dunk Contributing Member

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    We also need Clint to miss free throws, rebounds, and play less minutes.
     
  20. dmoneybangbang

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    Irrational fans vs rational fans.
     
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