Is the luxury tax is bad for MLB?

While all of those factors may be true, baseball’s luxury tax has undoubtedly also played a role in free agency grinding to a halt.

The San Francisco Giants have done the same, prompting Grant Brisbee of SB Nation to explore some of the ways in which the luxury tax has impacted free agency this winter.

One of the things those teams aren’t saying, but Brisbee mentions, is that the luxury tax gives clubs another excuse to not pay elite free agents.

The big market teams will now simply wait out elite free agents, forcing them to lower their asking price.

There’s no benefit to small market teams, making the name “competitive balance tax” nothing more than an exceptional attempt at branding by the league.

Small market teams aren’t magically able to offer $120 million contracts for top flight players with the luxury tax in place.

That creates a scenario where the top free agents still sign with the big market teams, but at a fraction of their market cost.