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The Yankees Will Pay $29 Million In Luxury Tax This Year

The most interesting aspect of the luxury tax penalties isn't what the Yankees are paying for the right to spend money—more than Alex Rodriguez's salary, more than the Astros' entire payroll. It's that the Dodgers, with a nearly identical payroll, owe just a third of the Yankees' tax bill.

New York and Los Angeles are the only two teams to exceed the $178 million threshold, according to figures obtained by USA Today. (The Red Sox, thanks in large part to last season's megatrade with the Dodgers that managed to cut payroll and make Boston better, came in just under the wire.)


And while the Yankees will have to pay $29.1 million in luxury tax on their $236.2 million payroll, the Dodgers, at $234.5 million, owe "just" $9.9 million. The reason is the "repeat offender" provision in the CBA (see page 99)—for going over the threshold so many years in a row, the Yankees are hit with a 50 percent bill on their excess payroll. The Dodgers, because they are first-time violators, are in the 17.5 percent tax bracket.

No wonder the Yankees are so desperate to shed payroll this offseason. If they get under the threshold for just a single season, they'll revert back to the lowest tax bracket. With the threshold increasing to $189 million next year, and Alex Rodriguez's $25 million potentially coming off the books due to suspension, a little thriftiness now could save hundreds of millions over the coming years.

[USA Today]

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