![]() When it would take effect and how much the tax would be is not known.Īll six teams that had payrolls above the tax threshold had reset their tax rates within a year after the latest tax table went into effect, leading players to believe that clubs treat the tax threshold as a de-facto salary cap. MLB’s proposal is for three tiers with a 25 % tax kicking in at $180 million. The rate resets if payroll falls below tax threshold for a season. The tax rate is 20% for first-time payors, 30% for second-time payors, and 50% for payors for 3 or more consecutive times. The current competitive balance tax structure imposes a tax on payrolls above $210 million. The threshold has not come close to keeping pace with soaring MLB revenues, which is a failure of previous bargaining by the MLBPA. $180 million, less $15M in player benefits, would leave a maximum $165M for the 40 man payroll before a tax kicks in. The proposal as it stands is dead on arrival, as the idea of lowering the tax threshold’s lowest tier from the current $210 million to $180 million for the lowest tier is a complete non starter with players who want to see the tax threshold increased, not lowered. The proposal contains other terms which are not yet known, and there has been no public comment from players or owners. ![]() According to Evan Drellich and Ken Rosenthal at the Athletic, MLB owners put forth a proposal that includes a salary floor of $100 million, but also includes a proposal to lower the competitive balance tax threshold to $180 million. Major league players and owners sat down to discuss the next collective bargaining agreement (CBA) for the first time on Monday.
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