Injuries forced the Philadelphia 76ers to forgo the 2024-25 season and become sellers at the trade deadline to avoid the luxury tax threshold. It turns out that under the right circumstances, Philadelphia could have similar plans.
ESPN’s Bobby Marks reported this Monday that the health of Joel Embiid and Paul George will factor into the 76ers’ trade talks. If Philadelphia goes through similar issues as last year, cost cutting may once again be the route needed. The 76ers will play their first game of the season against the Boston Celtics on October 22 at 7:30 PM EST, with Embiid and George’s status remaining uncertain.
Why is the luxury tax important?
While crossing the tax line may seem like a team-building setback, it mainly affects Josh Harris’ bank account. Luxury tax teams typically pay dollar for dollar on the amount above the threshold where they are. The penalties gradually increase if a team is in the tax for several years in a row.
The 76ers are about $5.8 million above the $187.9 million luxury tax threshold after Quentin Grimes accepted his $8.7 million qualifying offer on Wednesday. If Philadelphia wanted to avoid the luxury tax, all Kelly Oubre Jr., who opted for his $8.4 million player option on June 29, would have to do is take a salary dump.
This is nothing new
Astute fans may have noticed that Philadelphia has made deals during the past three trade deadlines that separated it from the luxury tax.
Most recently, Philadelphia traded Caleb and KJ Martin, as well as Reggie Jackson, in February to acquire Grimes and Jared Butler, providing financial flexibility from both a tax and roster standpoint.
In previous seasons, the 76ers dealt Matisse Thybulle to the Portland Trail Blazers in a four-team trade that netted them Jalen McDaniels from the Charlotte Hornets on February 9, 2023. Philadelphia was able to escape the tax after dealing a fan favorite.
When Embiid suffered a torn left meniscus in January 2024, the 76ers made a series of moves that avoided additional compensation and offered salary cap flexibility. Philadelphia walked away from the 2024 deadline with Buddy Hield and Cameron Payne at the expense of Danuel House Jr, Marcus Morris Sr, Furkan Korkmaz, Patrick Beverley and Jaden Springer.
From an outside perspective, it’s unfair to conclude that the 76ers made all these transactions to avoid the luxury tax. However, two of the last three times Philadelphia escaped the tax cap, its season was derailed by injuries, giving it incentive to do so. If the 76ers are healthy and competitive, it will be interesting to see how the front office navigates the 2026 trade deadline.
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