FanPost

Parity in the EPL? Where's the Luxury Tax?

Financial Fair Play, and Premier League Spending Controls are both in the process of being implemented. Both are meant to keep teams from spending beyond their means and at least consider some semblance of financial responsibility. A side affect of these rules however, is that they effectively keep the "haves" as the haves and the "have nots" from becoming haves.

Why does European Football seemingly have no desire for parity? There are effectively only a few teams in every big league that win, year after year. The same teams repeating in the Champions League.

The easiest explanations for this are :

#1 It's good for business if the most popular team(s) are always the best. This is quite obvious, and there is no bigger motivator in sports than money.

#2 Many top leagues. If the EPL tried to implement a parity tool, and the other leagues did not, they would be handicapped in European competitions. It's already difficult to challenge Real Madrid and Barcelona because of their crazy/stupid TV deal's. Any measure that would decrease the "top" EPL club's spending power would make that even more challenging.

Putting those reasons aside for a moment, let's explore the idea of a Luxury Tax in the Premier League.

The EPL would never go for a hard salary cap, but a Luxury Tax is voluntary and actually promotes parity.

The NBA has a new Luxury Tax as of last year, which has already shown to be affective in influencing team spending. Some teams will pay the tax while others are being more prudent to avoid it.

In the EPL this is how I would envision the Luxury Tax working:

1. Set the Luxury Tax Threshold at £100m for the 23 Squad Players.

2. Those above that threshold pay the Tax (United, City, Chelsea, Arsenal, Liverpool, Spurs)

3. The rates are 25% for the first £25m above. 50% for the next £50m. And then 100% for every £ above that (£175m)

So a team with £125m in salary would pay £6.25m in tax. A team with £175m in salary would pay £31.25m in tax. And a team with £200m in salary would pay £56.25m in tax.

4. All tax money is pooled together and paid out evenly to those team that were below the threshold (£100m)

This type of Luxury Tax model would not prohibit teams from spending highly on wages, but would encourage cost control. At the same time teams with less would receive an annual benefit that would help bring parity to the wage structure and the league. The idea would be to bring the range of EPL wages to £50m - 150m. Currently the range is roughly £20m - £200m.

None of this is likely to happen, but it sure is interesting to think about in a league that claims to be the most competitive from top to bottom.

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