Individual salaries absolutely is the issue. Individual salaries are what the Union is worried about. Individual salaries are what the owners are worried about. It's not the cost of hotdogs that they are worried about. It's individual salaries.
The Union doesn't want the luxary tax because that will prevent teams from being able to give higher and higher multi million dollar individual salaries.
The Owners want the luxary tax because some of the owners can't stop themselves from getting a player they always wanted, and thereby paying that kind of money, thereby increasing everyone elses individual salary, because Joe can say that he is worth at least 50% of what Rod is worth. And when it goes to arbitration, and the arbitrator looks at the stats , guess what, he is 50% as good as Rod, so guess what, he gets his salary demands. Owners can't hold too much back, because if they do, then there is another colusion lawsuit. So they CAN'T pay players what they want.
Artificial intelligence is no match for natural stupidity.