Originally Posted by SMC
If I'm not mistaken, the Knicks haven't hit the luxury tax threshhold yet. They got the MLE by being over the cap. They're using the Mini MLE to keep under the tax.
the way i understand it, every team over the cap gets the MLE.
but if you use the full MLE ($5 million) you are making a firm commitment that you WILL NOT be pay the luxury tax, so the full MLE triggers a "hard cap" right at the luxury tax threshold.
if you use the mini MLE instead ($3 million), you're allowed to go over the luxury tax threshold. however, tax paying teams are not allowed do sign-and-trades and the tax gets progressively worse and your payroll increases.