November 05, 2008
We have to wait until January before Barack Obama can start making all the changes he's been talking about.
His impact on baseball, however, could be felt as early as next week's open free agency. That's when agents might try to nail down signing bonuses for their players before Jan. 1 in an attempt to avoid Obama's proposed tax plan.
Even if it means running the risk of being called unpatriotic by Joe Biden.
If signing bonuses are paid before Jan. 1, they likely would be taxed at the current rate and would not be subject to any increase.
"It's something we'll consider," agent Craig Landis said Tuesday at the general managers' meetings. "Besides the federal issue, we have a state issue in some cases, anyway, where it's advantageous to take signing bonuses because of the state income tax. A Florida resident can take the signing bonus and not have to pay his team's state tax."
Obama's proposal would increase federal income tax on families earning more than $250,000 annually, money that would help finance a decrease for workers and families earning less than $200,000. It's also possible more income might be subject to the Social Security tax.
The Juice Blog has an interesting post on this topic, including the observations that Obama's tax increase means giving up about 6.5 games of pay and that players might opt to backload their contracts even more than usual in an attempt to outlast a 4-year term.
Also, baseball isn't the only sport that could face this situation. Pro Football Talk believes there might be a push for renegotiated deals in the NFL over the next two months.