Tuesday, December 22, 2009
The New York Yankees have been hit with a $25.69 million "Luxury" Tax. They were the only team in Major League Baseball to be assessed the tax this year, and the only team to have to pay it in all seven years of its existence. The Yankees paid a 40% rate of their payroll in excess of $162 million. They have paid a whopping $174 million in luxury taxes since 2003. The original name for the tax was The Competitive Balance Tax, believe it or not. Even stranger, the tax revenues are not distributed to the smaller market clubs in order to possibly enable them to be more competitive. I maintain that the tax is a farce. It is merely an excuse for Major League Baseball to impose a fine on the big market clubs. Teams like the Yankees could care less. If they did, they would curtail their spending. I think MLB should raise the salary cap slightly, and do away with the monetary fines. Instead, impose a system that costs teams top draft picks for the amounts they go over the cap. And I'm not talking about late round selections, but 1st and 2nd rounders for a succession of years. At least try to implement a system that could actually hurt teams in a competitive sense. Then they would have to make trades to acquire top, young talent and the smaller market teams would have something to barter with. Perhaps in the long run it would contribute to leveling the playing field a little.