Although I neglected to mention it in the article, Brian Borawski brought to my attention the fact that the luxury tax has had some positive effects. Last off-season when everyone thought the Yankees were going to sign Carlos Beltran, we were all surprised when they withdrew from the bidding. The Washington Post had this to say about it at the time:
Yankees officials acknowledge that they were constrained by two of the changes adopted three years ago -- revenue-sharing and a penalty against high-spending clubs known as the luxury tax. "We had priorities this winter -- primarily, improving our starting pitching -- and we feel we met those priorities," Yankees President Randy Levine said. "We're like every other team, even though our revenues are larger than other teams'. We're conscious of revenue sharing and the luxury tax."
Of course, Beltran ended up going to another large market team but the tax (targeted primarily at the Yankees) had its intended effect.
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