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OT: MLB Discussion Thread: Part XXIV

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True Blue

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nyr2k2 said:
Doesn't the luxury tax only tax money spent over the threshold? Like it's being talked about as if every move would suddenly become 40% more expensive. It's only the money you spend in excess of the threshold that gets taxed. So even if you were $60M over, at the 40% rate, that's a bill of $24M. It's not like the $250M payroll becomes $350M or whatever. Am I roghr on this?
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It would be on all new contracts, once over the threshold. With yearly escalators. So sign Machado and go over the limit for 2019. Now while true that Judge does not reach UFA for a number of years, he does come up for arbitration rights. Whatever that amount is ruled to be, the Yankees wold have to pay 22.2% more. Then the next year, it would b 30% more. Then when he is ready to sign his $300m contract, it would actually cost $450m.
 

RGY

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True Blue said:
It would be on all new contracts, once over the threshold. With yearly escalators. So sign Machado and go over the limit for 2019. Now while true that Judge does not reach UFA for a number of years, he does come up for arbitration rights. Whatever that amount is ruled to be, the Yankees wold have to pay 22.2% more. Then the next year, it would b 30% more. Then when he is ready to sign his $300m contract, it would actually cost $450m.
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Still ignoring that the Yankees can shed salary next season and the seasons that follow.

This is not black and white, and that is the bottom line.

Sign Machado and move onto the next item on the list.

News:

 

True Blue

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RGY said:
Still ignoring that the Yankees can shed salary next season and the seasons that follow.

This is not black and white, and that is the bottom line.

Sign Machado and move onto the next item on the list.
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They will also add salary. You cannot ignore that. Signing Machado is the last thing in the world that they need. Not only from another righty bat, but also that it will be item that will directly lead to hamstringing them on future contracts, draft positions and international pool money.
 

RGY

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True Blue said:
They will also add salary. You cannot ignore that. Signing Machado is the last thing in the world that they need. Not only from another righty bat, but also that it will be item that will directly lead to hamstringing them on future contracts, draft positions and international pool money.
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Agree to disagree.

But i do agree they do not need another righty bat and I prefer Harper if i were to choose between the two.

By shedding salary they will be able to afford arbitrational salaries that are handed out. Its things they can re-evaluate after this season that hopefully ends in a championship.

Not concerned about draft positioning when they are winning championship(s)...

They can, and already have in the past, find ways to recoup international signing money through trades...

These are just sticking points that should not hold them back for the build of the 2019 team. They are all in to win right now.
 
sbjnyc

sbjnyc

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True Blue said:
It would be on all new contracts, once over the threshold. With yearly escalators. So sign Machado and go over the limit for 2019. Now while true that Judge does not reach UFA for a number of years, he does come up for arbitration rights. Whatever that amount is ruled to be, the Yankees wold have to pay 22.2% more. Then the next year, it would b 30% more. Then when he is ready to sign his $300m contract, it would actually cost $450m.
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AFAIK it doesn't matter what year a particular contract is in, just how far the yanks (or whoever) is over the threshold and how many consecutive years they have been over the threshold. So if the Yanks are over the threshold in 2019 and 2020 and give Judge a long term deal starting in 2021 then that first year will have a tax of 40% and 50% thereafter to the extent it's over the threshold (assuming the luxury tax in the CBA doesn't change).
 

True Blue

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sbjnyc said:
AFAIK it doesn't matter what year a particular contract is in, just how far the yanks (or whoever) is over the threshold and how many consecutive years they have been over the threshold. So if the Yanks are over the threshold in 2019 and 2020 and give Judge a long term deal starting in 2021 then that first year will have a tax of 40% and 50% thereafter to the extent it's over the threshold (assuming the luxury tax in the CBA doesn't change).
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I know. My example was pretending that it was year 5 over the limit when they give Judge the contract that prevents him from going free agent.
 
sbjnyc

sbjnyc

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nyr2k2 said:
Doesn't the luxury tax only tax money spent over the threshold? Like it's being talked about as if every move would suddenly become 40% more expensive. It's only the money you spend in excess of the threshold that gets taxed. So even if you were $60M over, at the 40% rate, that's a bill of $24M. It's not like the $250M payroll becomes $350M or whatever. Am I roghr on this?
Click to expand...
It means that an untaxed team can pay a UFA a lot more money while actually paying less cash than an untaxed team. The net result is that a team paying luxury tax has to significantly overpay for free agents.
 
nyr2k2

nyr2k2

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sbjnyc said:
It means that an untaxed team can pay a UFA a lot more money while actually paying less cash than an untaxed team. The net result is that a team paying luxury tax has to significantly overpay for free agents.
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Yeah I get that. I was just talking about how some were portraying it as if a deal of this size automatically and irreversibly becomes a deal of this size, when in fact that's not the case (since it's just a percentage of the total you are over, which can obviously fluctuate significantly year-to-year). Like a 300M deal only becomes a 450M deal if it's all in excess of the threshold and the team never gets back under, to use the earlier example. That's only a theoretical possibility.
 
sbjnyc

sbjnyc

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nyr2k2 said:
Yeah I get that. I was just talking about how some were portraying it as if a deal of this size automatically and irreversibly becomes a deal of this size, when in fact that's not the case (since it's just a percentage of the total you are over, which can obviously fluctuate significantly year-to-year). Like a 300M deal only becomes a 450M deal if it's all in excess of the threshold and the team never gets back under, to use the earlier example. That's only a theoretical possibility.
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It's only theoretical until the Yankees go back to their evil empire days as some people here want when they paid $300+ million in luxury taxes over 15 years when the tax was much less punitive. I don't think they will though. Its possible they will sign Machado but they may be able to squeeze him in under the threshold (not sure) but at some point there are only so many $20+ million players you can have on your payroll without going over the threshold.

The whole discussion is due to a tweet from AP saying the $12 million the Sox paid is insignificant so the tax means nothing missing out on the fact that this is just the 1st year they were over. Sure they can shed salary to avoid the higher taxes later on but if you shed salary in order to avoid paying higher taxes then the tax isn't insignificant after all.
 
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nyr2k2

nyr2k2

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Let's just hope they never do anything like the NBA. That convoluted, Byzantine system with all its exceptions and clauses makes my head spin. I know that's more of a soft cap than simple luxury tax, but still, it's f***ing nuts.
 
nyr2k2

nyr2k2

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Harvey signed in Anaheim for one year, $11M.

The Mets signed one-time hot-shot Zach Lee to a minor league deal.
 

RGY

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I think they can get him signed at 10 years, $285 million....and thats with him leaving money on the table from Philly and Chicago
 
One Winged Angel

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True Blue said:
It would be on all new contracts, once over the threshold. With yearly escalators. So sign Machado and go over the limit for 2019. Now while true that Judge does not reach UFA for a number of years, he does come up for arbitration rights. Whatever that amount is ruled to be, the Yankees wold have to pay 22.2% more. Then the next year, it would b 30% more. Then when he is ready to sign his $300m contract, it would actually cost $450m.
Click to expand...

Where have you seen this? Because I haven't found a single thing stating this and I've been doing research on it.
 
sbjnyc

sbjnyc

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One Winged Angel said:
It doesn't say anything about individual contracts getting taxed.
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Yes then I agree, it's the overage that gets taxed. I'm still not sure what the issue is. It's easier to describe for the sox since they're already over the threshold. I don't really know how much space the Yankees have.
 
nyr2k2

nyr2k2

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sbjnyc said:
Yes then I agree, it's the overage that gets taxed. I'm still not sure what the issue is. It's easier to describe for the sox since they're already over the threshold. I don't really know how much space the Yankees have.
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Part of the issue is this concept of a 300M contract becoming a 450M. Payrolls are taxed, not individual contracts. It's just a really weird way of stating it, that doesn't accurately portray the calculation. Of course a 300M contract could eventually become 450M, but it's weird to isolate individual contracts from a full payroll. And getting from 300M to 450M, It also assumes a full 50% luxury tax rate over the full term of the deal, which to me seems really unlikely. It's not "wrong," just weirdly-phrased and probably unrealistic (IMO).

And then the second part is the reference one person made to it applying to "all new contracts once over the threshold," which I don't really understand or believe to be accurate. Doesn't matter if a contract is old or new. They calculate your bill at the end of the year--doesn't matter what contracts got you there.
 
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