The Bulls are no fans of the luxury tax and will likely do what they can to not pay it this season. The conventional wisdom is that Rip Hamilton's contract is mildly moveable and is almost exactly the correct size to bring the team below the salary cap threshold (their current salary level is at 74.6 million so that, by trading Rip's contract and throwing in a 2nd rounder, the team would be beneath the tax threshold and have room for a minimum contract. Woop-dee-damn-doo.).
Many unkind words have been said on this blog regarding the Bulls off-season. Long story short, through incompetence and a desire to avoid luxury tax payments, the front office basically dismantled a championship caliber team (even if your immediate instinct is to disagree with this sentiment, you should read DRose01's post as it is quite compelling). Their decisions were not only unsound insofar as the team has significantly less talent this season, but they have also done much to confirm their reputation as a cheap, outmoded franchise (see Sham's excellent series of articles on the Teague signing in addition to the Rickie O'Donnell's previously linked rants). While these moves have made me quite upset, I will refrain from a venomous rant of my own and instead offer a continuation of the sentiment voiced by Aggrey Sam that the Bulls are sinking into the NBA's middle class. After the jump, I will make the case that not only is he correct but that we are trapped there.
There are a finite number of ways to add salary once you are above the luxury tax. These are Bird rights (resigning your own players), the mid-level exception (most of this has been used on Hinrich), bi-annual exceptions (used on Italian goof, Marco Belinelli), rookie signings (first round pick only) and minimum contracts (see Coon's salary cap FAQ for the relevant details). As such, we are in a situation where we have effectively used all of our exceptions so that the only way that we can add salary is through resigning our own players (at this point, that is only Taj Gibson). This does not automatically imply that you cannot make any moves (see Howard, Dwight), but it does mean that you must have some contracts lying around that you are willing to part with.
An therein lies the understated and most destructive aspect of the dismantling of the bench mob. Not only did we part with talent in order get within a stones throw of the luxury tax line (by stone, I mean Rip Hamilton's contract), but we have effectively ruined any hope of ever going significantly above the line without dismantling our core. Thus, effectively, we cannot add a significant contract to this team without parting ways with either Deng or Noah. If we had resigned Korver and Watson then we could have packaged those contracts, and possibly Rip's contract and picks, in exchange for a productive shooting guard and talented bench players. By not resigning the bench mob, we have destroyed our flexibility.
Clearly, the economic aspects of the NBA has changed. This season, we would pay dollar for dollar luxury tax for Korver and Watson. Next season, we would pay $1.75 for every dollar if we were able to parlay those contracts into a longer term deal with a better player. That said, when you have a championship contender, and we did have one, you do whatever you can to acquire more talent (example: every team that has ever won a championship in any competitive sport, ever). If this means that you operate in the red for a few seasons, then this is the tradeoff that you must make. That being said, the Bulls have an operating income of 60 million, so that even with the luxury tax payments involved in such moves, "operating in the red" would mean that they would only earn 40 million in operating income each year. Compare this to the Dallas Mavericks who had negative operating income during their championship season so that they could get their players and their fans that trophy.
In conclusion, the Bulls have no moveable assets except for Rip Hamilton who is not all that moveable, and our core. We are capped out and have used our exceptions so that we can only acquire players through the draft and through the trade. We failed to re-sign all of our trade-able contracts so we are trapped in the middle class and there is no way out. Hence KC's speculation about a 2 year plan when Deng's contract is off the books and Boozer can be amnestied in a more palatable manner. Hence the Deng trade rumors. Deng, Rose and Noah will not win a championship together and this only became a reality when we failed to resign Korver and Watson.