Principle of the commons and the luxury tax

[cynic]

I noticed a very lousy argument by a couple of you (including Diesel) about the luxury tax.

Your assumption was that the luxury tax is redistributed amongst all owners. Let's SAY that this is true, for now.

You argued that owners wouldn't be reluctant to go over the cap because that money would just be redistributed.

This is where I take exception. I'm reminded of the principle of the commons (economics).

Take an arbitrary owner who is over the cap. Said owner has a free agent to resign. If he gives him his requested $10 million per year deal, it will cost him an additional $10 million per year in luxury tax. Since that $10 million will be redistributed among all of the owners, said owner will get roughly $300,000 back from that extra money he spent. He's still out $9.7 million, guys.

The luxury tax IS a deterrent, even if your errant suppositions about redistribution are true.

Shrewd readers will note that this is actually a reverse case of the principle of the commons.

Principle of the commons states that self-interested people sharing common resources will act in a way that serves their own interests, with no regard to the fate of the common resources.

The common resources, in this case, are the luxury tax funds.