NYY payroll and the luxury tax

[weird-O]

I heard some interesting info on the luxury tax, specific to the NYY payroll.

The Yankees are trying to get their payroll down to $189K for the 2014 season (from what I heard, they have too much money on the books to do it in 2013).

at this point, they pay a 50% luxury tax on their payroll. if they get the payroll down to $189K, for 2 consecutive seasons, their tax gets reset to 17%

The expectation is that they will return to their usual spending habits for the 2016 season, once their tax is reset.

This info came from some guy who has covered the NYY for the past 12 years, I didn't catch his name when he was being interviewed on MLB radio.

I thought it was interesting to hear some of these details on how the luxury tax works.

[hector]

I heard some interesting info on the luxury tax, specific to the NYY payroll.

The Yankees are trying to get their payroll down to $189K for the 2014 season (from what I heard, they have too much money on the books to do it in 2013).

at this point, they pay a 50% luxury tax on their payroll. if they get the payroll down to $189K, for 2 consecutive seasons, their tax gets reset to 17%

The expectation is that they will return to their usual spending habits for the 2016 season, once their tax is reset.

This info came from some guy who has covered the NYY for the past 12 years, I didn't catch his name when he was being interviewed on MLB radio.

I thought it was interesting to hear some of these details on how the luxury tax works.

How much was their total payroll and luxury tax in 2012? I'm curious how the 50% and 17% is applied.

[weird-O]

How much was their total payroll and luxury tax in 2012? I'm curious how the 50% and 17% is applied.

their 2012 payroll was $197.9M. the luxury tax threshhold was $178M. they were over that line by ~$20M, their 2012 tax rate was 40%

20M x .40= $7.99M in tax

[hector]

their 2012 payroll was $197.9M. the luxury tax threshhold was $178M. they were over that line by ~$20M, their 2012 tax rate was 40%

20M x .40= $7.99M in tax

The Yankees get no pity from me. My own marginal tax rate is higher than theirs.

[dandrews]

their 2012 payroll was $197.9M. the luxury tax threshhold was $178M. they were over that line by ~$20M, their 2012 tax rate was 40%

20M x .40= $7.99M in tax

8 mil seems like pocket change to an organization like the Yankees.

Baseball should take after what the NBA did and adopt a 100% tax rate. Pay $1 for every $1 over. Something needs to keep these teams from completely ignoring the luxury tax threshold.

[Far from home]

8 mil seems like pocket change to an organization like the Yankees.

Baseball should take after what the NBA did and adopt a 100% tax rate. Pay $1 for every $1 over. Something needs to keep these teams from completely ignoring the luxury tax threshold.

C'mon - that would be socialist.
We know that baseball is a capitalist system

[weird-O]

The Yankees get no pity from me. My own marginal tax rate is higher than theirs.

you went through a great deal of effort to guide the discussion to an area that would allow you to make that anecdote. too bad it wasn't funny, interesting or topical.

[weird-O]

8 mil seems like pocket change to an organization like the Yankees.

Baseball should take after what the NBA did and adopt a 100% tax rate. Pay $1 for every $1 over. Something needs to keep these teams from completely ignoring the luxury tax threshold.

I was thinking the same thing. for a multi-billion $$$ corporation like the yankees, $8M is no kind of penalty at all.

[ivanbalt]

I was thinking the same thing. for a multi-billion $$$ corporation like the yankees, $8M is no kind of penalty at all.

What's that, like 1/3 of Arod's salary?

[weird-O]

What's that, like 1/3 of Arod's salary?

it's closer to 1/4

[Jimmy Jazz]

8 mil seems like pocket change to an organization like the Yankees.

Baseball should take after what the NBA did and adopt a 100% tax rate. Pay $1 for every $1 over. Something needs to keep these teams from completely ignoring the luxury tax threshold.

The percentage penalty you pay goes up the more seasons in a row you are over. So next season they will pay a 50% penalty. That is the top penalty.

There is also more at stake than the luxury tax amount, there is also a revenue sharing refund too.

This site explains it all pretty well:
http://itsaboutthemoney.net/archives...d-the-yankees/