Dec
21
Yanks hit with $25.69 million payroll tax
ByFor the Yankees, winning the World Series came with a hefty price tag this year as MLB announced on Monday that the Yankees were the only team to be levied a tax on its payroll in 2009. The team must pay its $25.69 million to the Commissioner’s Office by Jan. 31. This marks the seventh straight year that the Yanks have had to pay the tax, and of the $190 million in luxury tax payments collected by baseball, $174 million of that has come from the Yanks. Considering that the idea of the luxury tax was to rein in the Yanks’ spending ways, I’d say it’s been a stunning failure for baseball. At least the other teams can to benefit in form of added revenue earnings when the Yanks’ money is redistributed.
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Racist against winners.
and all those fans of other teams will gladly accept it while asking for a salary cap with a bottom lower than their teams payroll
The Yankees have the money and they spend it. unlike some owners who put it in their pocket.
With that $25.60 million the owners of the Marlins, Royals, Pirates, and others can buy a nice Christmas dinner… YAY!
How exactly does the tax work? Does the money truly get divvied up the the other 29 teams?
Nope. It doesn’t go to the other teams. I’m not sure, but I believe it goes to thinks like the player’s pension fund and programs to promote baseball to kids.
Young money arm!
army*
I suppose John Henry will start complaining that the revenue is not shared among small market teams such as Boston.
Poor Boston.
Perhaps Johnny Damon will inform the Yankees that he will personally eat the $25 million luxury tax, thereby playing in 2010 for -$5 million dollars.
At least the other teams can to benefit in form of added revenue earnings when the Yanks’ money is redistributed.
In theory, more than in practice.
http://www.youtube.com/watch?v=VAOUbr2HEpo
Don’t spend it all on relievers, MLB!
I thought the amount would be higher than that at the 40% tax rate. Is it 40% tax rate for all salary after the threshold amount and if so what was that amount in 2009?
40% of everything over the threshold. So if the limit is $160M and they spend $200M, the $40M extra gets taxed.
Looks like the Yankees spent around 226-227M on total payroll for 2009. The threshold was 162M for 2009 which means 64+M was subjected to the 40% luxury tax rate.
I think it’s high time that MLB forced it’s owners to open their books to a non-partisan individual or panel who would determine their actual income and then each team should be required to spend a minimum pre-set percentage of that income, or more.
Considering that the idea of the luxury tax was to rein in the Yanks’ spending ways, I’d say it’s been a stunning failure for baseball.
Eh, I think it works, it’s just that the Yankees make a ridiculous amount more than even the second highest revenue team does. They do have to at least pretend it’s not just a tax on the Yankees, so there’s only so far they can go.
Without the luxury tax, the Yankees probably would’ve just spent an extra $25.69m on payroll instead. That’s good for another 1-2 big free agent signings.
Cuz Im the Taxman, yeaaaah im the taxman.
/Beatles’d
Amazing stat, $174 of the $190 million came from the Yankees. I assume this is another great Bud Selig idea…
While i love our teams willingness to spend to try and put together a winning team, i’d not be totally opposed to some type of salary cap (realizing the players union would never let that happen).
But then you’d better damn sure have a salary basement as well so direct revenues and especially shared revenue like this doesn’t just go into the pockets of the Royals & Pirates & Padres, etc. who it doesn’t appear even try to win.
This is a travesty. The Yankees spend 53% of revenue on salary (for the 40 man, not counting coaches), teams like the Pirates and Marlins are in the low to mid teens. The Twinkees spend 43% of revenue on salary, even though Carl Polhad is vastly richer than the Steinbrenners. We need a minimal salary, as a floor, to ensure that teams are making a good faith effort to put together winning teams, otherwise these welfare checks are just a travesty of a mockery of a sham.
[...] Yankees have paid $13.9M, $18M, and $25.69M in luxury tax in the three previous seasons. Since the tax was implemented in 2003, New York has [...]