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The Raptors Are Currently into the Luxury Tax: What Does it Mean?

The Toronto Raptors currently sit above the NBA's luxury tax, but the organization already appears to be planning to slip below the $137 million limit
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The Toronto Raptors are in a bit of a strange spot this season.

On one hand, it's the beginning of a retooling for the organization. With Kyle Lowry heading south, Toronto is pivoting to a new era and will certainly take a step back as the organization enters a new era of Raptors basketball. On the other hand, however, Toronto isn't entirely acting like a small market organization trying to reset this season.

On the eve of Toronto's opening night, the Raptors have a salary cap of $137.4 million, the ninth most in the NBA, and with a luxury tax limit of 136.6 million, Toronto is heading toward a $1.05 million luxury tax bill. Considering the Raptors aren't going to be contenders this season, this isn't ideal. 

Fortunately for Toronto, the NBA's luxury tax isn't calculated until the final day of the regular season and the Raptors already appear to be planning to get below the tax threshold.

For one, Toronto has reportedly asked Isaac Bonga and Sam Dekker to push the date their contracts guarantee to Nov 6, per ESPN's Bobby Marks. That gives Toronto an extra two weeks to decide what to do with the two forwards and potentially shed $1.67 million to get below the luxury tax threshold at a later date. The Raptors could keep the two forwards around until Chris Boucher and Yuta Watanabe get healthy and then waive one of them to save some money.

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Alternatively, Toronto can keep both forwards around this season and shave off that $1 million at the trade deadline by moving Goran Dragic in a money-saving deal. Assuming Dragic has a strong start to the season, this shouldn't be too difficult. Teams are always looking for bench depth at midseason and Dragic shouldn't cost too much to acquire.

Either way, there's no doubt Toronto is going to get below that tax limit. It's not that saving $1 million is critical for Maple Leafs Sports & Entertainment, but the Raptors aren't going to want to be forced to pay the repeater luxury tax if they go above the luxury tax next season. So in a down year, save the money and re-enter the luxury tax when the money is really needed.

Further Reading

OG Anunoby is poised to become the guy for the Raptors with Pascal Siakam out early

No matter what the Raptors decide, Sam Dekker is finally at ease

Raptors Roster Rundown: what to expect from Toronto's final 17