Now the salary cap and the luxury tax is used in the U.S.A for N.H.L and, Baseball and Basketball clubs.
Each club has a salary cap ,it is calculated on their debt, income and on their expenditure as well..
So once their salary cap s fixed for a year they will have to trim down their wages by one way or other , by say selling players. And it will change yearly.
Now if the club has gone and spent one million Euros over the salary cap, then one million Euros to a common basket. And at the end of the year these fines called luxury tax will be devided equally between all the clubs
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