Golden State Warriors: Is the NBA luxury tax unfair?

The NBA salary cap and luxury tax are designed to ensure competitive balance across smaller and larger markets. Has it had an overcorrection impact on a team like the Golden State Warriors?

Joe Lacob seems to think so.

"“I think it’s a very unfair system because our team is built by — all top eight players are all drafted by this team.”Joe Lacob via The Point Forward podcast"

Lacob quickly went on to acknowledge Andrew Wiggins was not drafted by Golden State — but made a note of how the tax is restricting the Warriors from paying the guys they drafted and developed.

"“You should be paying a high luxury tax if you’re using it to go get free agents and outspend your competition. But if you’re developing your own guys and paying Steph Curry what he deserves and Klay Thompson what he’s earned, why am I paying $200 million in luxury tax? I don’t think that’s fair.”"

During the podcast, Lacob also mentions that he understands the backlash he received when signing Kevin Durant. Still, anyone in his position would have done the same thing — and the Warriors have righted their wrong through internal development.

Joe Lacob believes the luxury tax is unfairly penalizing the Golden State Warriors for their homegrown talent. Does he have a point?

Two things here.

Yes, Lacob probably does make a valid point.

The Warriors are a rare instance in which you have multiple star players who are worthy of max dollars, all drafted by the same team and playing out their career with the franchise (so far).

On top of this, you have the development of young prospects like Jordan Poole, who has certainly earned a payday, next to names like Jonathan Kuminga, James Wiseman and Moses Moody who could all demand extensions of their own.

It is hard to argue the Warriors didn’t do it the right way. As Lacob noted, all of their free agency signings last summer were for the minimum.

The luxury tax is a good thing

Moving to our second point.

The luxury tax is necessary.

Though the Warriors have managed to nudge themselves into one of the only problematic aspects of the tax, the league would be a disorganized mess without it.

It would be far too easy for big market teams to outbid everyone else and form unbalanced squads.

The NBA would have the potential to quickly dissolve into a rich get richer league where the same few franchises are the only teams with a chance of winning each year.

So while the current rules are hurting the Dubs, and more specifically Lacob’s pockets, a salary cap and luxury tax are the only ways for the game to exist.