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Increasing luxury tax a mixed bag for Trail Blazers

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General Manager Neil Olshey will have a little more flexibility to sign free agents and make trades. But so will everyone else.

2020 NBA Restart - All Access Practice Photo by Bill Baptist/NBAE via Getty Images

Buried in the news about the NBA’s plan to start the 2020-21 season by Christmas was an interesting piece of salary cap information from ESPN’s Bobby Marks:

Marks reports that there is unanimous support among NBA teams to raise the luxury tax to $139 million, about a $6 million increase from last year, even if the cap stays unchanged at $109 million as currently planned.

There’s no word on whether or not this idea has support from the player’s association (NBPA), but it’s a good bet they will approve any change that encourages teams to spend more on free agents.

How would this affect the Blazers?

In a vacuum, increasing the luxury tax and cap apron will help the Blazers. As we’ve discussed (repeatedly) on this site, the Blazers will be operating over the cap so once they use the mid-level exception they will be hard-capped at the apron (i.e. they won’t be able to exceed that amount for ANY reason).

The Blazers have about $93 million in salary guaranteed next season. But if we assume that Rodney Hood and Mario Hezonja opt in to their player options, Trevor Ariza is not cut, Wenyen Gabriel is re-signed, and a first round draft pick is added that money dries up real quick. If all of those things happen the Blazers will be a little about $117 million in payroll. Well above the $109 million cap line.

Even with the $117 million payroll the Blazers can use the MLE and bi-annual exception, which add up to about $9.9 million. Add those two salaries to the payroll and suddenly Portland’s at about $127 million — just below the $132.9 million luxury tax — without using the $7.1 million TPE generated by the Kent Bazemore trade, re-signing Carmelo Anthony, or re-signing Hassan Whiteside.

The increase in luxury tax will now give the Blazers some more flexibility to either retain Whiteside or use the TPE without bumping up against the luxury tax and/or cutting Ariza. There’s also extra flexibility to make an unbalanced trade that increases the team’s payroll. Overall, this is a positive for the Blazers offseason plans.

What’s the downside?

Currently only about six teams will be operating below the cap this offseason. Artificially heightening the luxury tax ceiling will give the Blazers extra flexibility, but it will also help some of their opponents. Several teams could now have access to the full MLE who would have been more significantly hampered otherwise. This will increase the competition for the mid-quality free agents who cannot fetch big money but are solid enough to command $9 million. The Blazers, who would have had the full MLE either way, will now face a slightly stiffer market to sign quality free agents.