And teams can trade players before they actually have to start paying them the large extension $$$'s at the end of their contracts. The luxury tax is just a function of the CBA. Aside from calculating the additional tax (pennies TBH) and draft pick issues, most of the arguments on here have been "well shouldn't the owners be able to make money." Well, they are using cash paid, not lux tax basis, in determining operating income for the year and what to pay out as distributions.