• Yankees absorb $18.9 million hit from luxury tax

    Summary of 2 articles · Updated Dec 14, 2012
    The New York Yankees were hit with an $18.9 million luxury tax by Major League Baseball, the 10th consecutive year they will pay a penalty for their spending. New York has run up a luxury tax bill of $224.2 million over the past decade, with the fee increasing from $13.9 million last year. The Yankees' tax rate rose from 40 percent to 42.5 percent this year and figures to climb to 50 percent next season. Dropping under the threshold would lower their potential tax rate in 2015 to 17.5 percent. "It affects my decision-making process, my communication about the pressure points we have," Yankees general manager Brian Cashman said, adding that market rates for free agents also impact his choices. For the regular payroll calculation 2012 income plus prorated shares of signing bonuses spending by the 30 big league teams broke $3 billion for the first time at $3.15 billion after falling $43,000 short of the milestone last year.

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