The New York Yankees made a big deal about being fiscally responsible (for, like, a week, back in 2012). Even coming into this season, they wanted to keep their team payroll below a league-wide tax threshold that triggers a 50 percent tax rate penalty after going past the $189 million mark. It's possible, considering bonuses for individuals already on the roster, that the Yankees already were over $189 million before Japan's Masahiro Tanaka came into their lives.
By adding him to the rolls Wednesday, they're definitely over $189 million now. If George Steinbrenner were still alive, he'd probably say ... "I'll get my checkbook." The Yankees, reports say, have paid $254 total in luxury taxes since 2003 and through the 2013 season — when they paid $29.1 million alone.
To celebrate going over for the 12th consecutive season, the Yankees should add a plaque honoring the $189 million luxury tax threshold in Monument Park, where all Yankee legends are honored at Yankee Stadium. Babe Ruth is out there, as are Lou Gehrig, Mickey Mantle and Yogi Berra. So is Steinbrenner (extra-large).
Only five teams have ever paid the luxury tax — the Dodgers, Angels Red Sox and Tigers are the others — but the Yankees are the only ones to pay it every season of its existence. It's about time they paid permanent tribute. The inscription would read:
"$189 Luxury Tax Threshold, 2014-2014. McCann and Beltran at Tanaka."
Make your arms wide and give this idea a hug.
Here are actual details about the luxury tax you might not have known:
From 2012 through 2016, teams who exceed the threshold for the first time must pay 17.5% of the amount they are over, 30% for the second consecutive year over, 40% for the third consecutive year over, and 50% for four or more consecutive years over the cap.
The money generated from the luxury tax is not distributed to the rest of the league, as is the case with the NBA, but rather is used for other purposes. The first $5 million is withheld to cover potential refunds, and is contributed to the Industry Growth Fund (IGF) if no refunds are forthcoming. The remaining money is divided as follows: 50% funds player benefits, 25% funds developing baseball in countries without high school baseball, and 25% goes to the IGF.
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- Sports & Recreation
- New York Yankees
- George Steinbrenner
- tax threshold
- Masahiro Tanaka