The Indiana Pacers are poised to pay the luxury tax for the first time since the 2004-05 season, marking a significant shift in the franchise's historically conservative spending approach.
The last time Indiana ventured into luxury tax territory was two decades ago, when the team was coming off an Eastern Conference Finals appearance in 2004 and fielding a legitimate championship contender. Now, with back-to-back Conference Finals appearances and their current Finals run, Pacers' ownership appears prepared to pay the luxury tax to continue competing again.
"From what I am told, the hope and belief is that ownership will greenlight them going a little bit into the tax for a little while," ESPN's Brian Windhorst revealed on Sunday's episode of The Hoop Collective Podcast.
Turner Re-Signing Would Push Pacers Over Tax Line
The primary catalyst for Indiana's luxury tax entry would be re-signing center Myles Turner in free agency. Turner's expected new contract would push the Pacers above the tax threshold, ending their two-decade streak of tax avoidance. The Pacers already have Tyrese Haliburton on a 30 percent max after he qualified for All-NBA along with Pascal Siakam on his four-year, $189.5 million max.
However, the franchise maintains flexibility to stay below the line if ownership changes course. The Pacers could potentially trade another rotation player to create the necessary salary cap space to remain under the luxury tax.
Core Locked Up Long-Term
Indiana's championship window appears secure regardless of the luxury tax decision, with their key players signed for multiple years:
• Tyrese Haliburton: Under contract through 2029
• Pascal Siakam: Under contract through 2028
• Andrew Nembhard: Under contract through 2028
• Obi Toppin: Under contract through 2028
• Aaron Nesmith: Under contract through 2027
The Pacers' willingness to pay the luxury tax represents a philosophical shift for an organization that has prioritized fiscal responsibility throughout most of its history. With a legitimate championship core in place and proven playoff success, Indiana appears ready to invest at the highest level to capitalize on their current window.
