Q&A: Won't an NBA style luxury tax just benefit the richest Premier League clubs? Mail Sport's MIKE KEEGAN answers the biggest questions on the revolutionary new proposal

A limit on permitted losses would be imposed on clubs, or a ‘soft’ salary cap would be introduced. 

If they breached any limit, the clubs would be ‘taxed’ based on the scale of their overspend. While some clubs want this system to replace points deductions, Premier League insiders say that ultimate threat would not be scrapped entirely.

Here, Mail Sport's MIKE KEEGAN answers the burning questions surrounding what would be a transformative measure.  

Why do top flight clubs want this shake-up?

Some do, some don’t. There is a view that such a tax would allow those with rich owners to spend big and attempt to join the Big Six, or Big Seven if you include Newcastle. 

It could make the Premier League more competitive and therefore even more attractive to broadcasters. The flipside is that it may allow those with limitless funds to dominate the league.

Isn’t this just going to help the richest clubs?

In short, yes. But it could also help aspirational clubs who want to bridge the gap to those at the top. It would open the door for another Manchester City to break into the elite.

How have the EFL reacted?

They are keeping out of it. The EFL’s focus is on the New Deal. They want Premier League clubs to sort this out because it means they may then get around to redistribution.

Would this fly with the Government regulator?

Lawyers are involved in the proposals. There is little prospect of any new system falling foul of the regulator.

What are the main drawbacks?

It allows those with serious wealth to spend even more, especially if the threat of points deductions goes away. There are also concerns over clubs deemed to be owned by nation states. There would be little to stop Dubai, for example, snapping up a top flight club and going big in the transfer market