Los Angeles Lakers general manager Mitch Kupchak sat down with Lakers.com's Mike Trudell to discuss a wide range of topics including the 2014 draft, the Lakers' thought process this season and moving forward, Pau Gasol, Nick Young and much, much more.
But one of the most intriguing parts of the interview comes near the beginning, where Kupchak opens up about the league's recently imposed repeater tax, which comes into play next season and penalizes teams for being over the luxury tax for multiple seasons.
Trudell asked Kupchak how much that penalty comes to mind when he's assembling a roster for the next couple of seasons.
Kupchak: You have to be out of the luxury tax in two out of five years to avoid a repeater penalty. If we stay in the tax this season, it will be three consecutive seasons as taxpayers. Now, how that impacts future decisions depends on the mechanics of each deal. Like anything else, if there is a debt that you have to pay, you'd like to get it behind you as soon as possible. But ownership here has never been afraid to be in the tax. If you're $30 million over the tax as a repeater, that's a tax bill of about $130 million. But if you're in the tax and it's only $1 million over, it's around $2.5 million. So you’re still a repeater in the latter situation, but that’s a big difference.
MT: In short, the repeater tax is a major factor you have to be aware of, but isn’t a black and white line you can’t cross, at least for the Lakers.
Kupchak: Correct. It's a looming black cloud that was created for a reason.
The Lakers can go under the luxury tax this season via trade and avoid the repeater tax penalty altogether, but NBA owners haven't made any determination as to what the "no repeater" penalty is. Like Kupchak says, if the Lakers end up only a million over the tax, the bill isn't too pricey for what the Lakers are, typically, willing to pay.
The "black cloud" here is the same one that haunts everyday Americans who find themselves in debt. Not being able to pay off your bill can add up and sink a team financially. That repeater tax is the reason Kupchak says that "you'd like to get it behind you as soon as possible."