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Time For a Luxury Tax in NASCAR

An Opinion



November 20, 2008

By Doug Demmons


Doug Demmons
Bruton Smith and Andy Hillenburg might be the biggest beneficiaries of NASCAR’s new ban on testing.

Smith has been trying to unload his North Wilkesboro Speedway for several years -- having already mined it for its Cup dates. All of a sudden that track has new value. Somebody is bound to buy it and turn it into a test track.

And Hillenburg recently finished a replica of the Martinsville surface behind his Rockingham Speedway that is bound to get a lot of business next year.

Just because NASCAR has banned testing doesn’t mean there won’t be testing. The ban applies to NASCAR-sanctioned tracks. It doesn’t mean Roush-Fenway or Hendrick or Gibbs can’t go test at some short track somewhere or even build their own track to test on.

Such testing will, of course, be of limited value. It won’t be at the actual tracks they’ll race on and the tires wont be the same. But that’s not going to stop the top teams, for whom saving money is not goal No. 1.

NASCAR had the right intent when it issued the testing ban last week. A small team can save $1 million a year by not testing. If you’re a small-team owner that could mean fewer layoffs or more races you can contest.

But the ban has a few problems.

It will increase the gap between the haves and the have-nots because the haves will find ways to get around the ban. Even at the newly downsized Earnhardt Ganassi Racing the urge to test lives on. Juan Pablo Montoya was asked Tuesday morning on a radio show about his offseason plans and said he’d be doing testing, testing and more testing.

It will also hurt driver development. Joey Logano, Scott Speed, Max Papis and Marcos Ambrose could all use as much time on unfamiliar tracks or in unfamiliar COTs as possible.

It will make it difficult for teams that struggle early to fix their problems. It is entirely possible that the Chase lineup for 2009 could be significantly different from 2008 -- although that might not be such a bad thing.

So here’s an idea: Divide the Cup universe into two groups -- teams that run just one or two cars and those that run three or four.

The big teams get to test whenever they want, however much they want, anywhere they want. It’s wide open.

But each time they test they have to pay a tax to NASCAR. In baseball this is called a luxury tax. It lets George Steinbrenner spend as much as he wants on middle relievers, but when he exceeds the salary cap he pays a tax that is distributed to the have-not teams. The idea is to even the playing field.

It could work with NASCAR testing too.

Hendrick and Gibbs and Roush test to their hearts’ content. They pay taxes to NASCAR for the right to do so. NASCAR takes that money and holds special test sessions for the one-and two-car teams at which tires, lodging and meals for crew members, engineers and telemetry are all provided by NASCAR.

The smaller teams not only save money, they get better.




Doug Demmons is a writer and editor for the Birmingham News ~ he writes daily and weekly auto racing columns ranging from NASCAR to open wheel to Formula One, local tracks and more... you can read Doug's columns online at Blog of Tommorow


You can contact Doug Demmons at .... Birmingham News

The thoughts and ideas expressed by this writer or any other writer on Insider Racing News, are not necessarily the views of the staff and/or management of IRN.

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