The commissioner's office sent out luxury tax bills to six teams on Friday, the Associated Press reports.
The luxury tax -- or what's technically known as the Competitive Balance Tax -- is designed to punish teams who exceed a certain payroll threshold, which means the tax functions as a soft salary cap of sorts. For 2016, that threshold was $189 million. Tax rates vary based on how much the team in question exceeds the threshold and how many consecutive years they've exceeded the threshold.
Here are, reportedly, those six teams and what they'll pay to the league office in taxes for this past season:
- Dodgers, $31.8 million
- Yankees, $27.4 million
- Red Sox, $4.5 million
- Tigers, $4 million
- Giants, $3.4 million
- Cubs, $2.96 million
As you can see, the Dodgers and Yankees tower over all by a significant margin (that's a very costly fourth-place finish for the Yanks). The Cubs, meantime, will probably be the happiest to fork over their penalty, seeing as how that high payroll in 2016 yielded a championship.
The threshold will be going up each year in keeping with the new collective bargaining agreement, and big spenders like the Dodgers and Yankees have stated or at least implied that they'd like to work their way down to penalty-free territory.
When you have abundant resources and designs on contention, though, it's easy for payroll to climb. For the upcoming season, the Dodgers are already over $200 million after re-signing Justin Turner and Kenley Jansen. Meantime, the Yankees aren't yet in penalty territory, but they've got a lot of arbitration raises in the offing. However, there's a chance the Yanks get under the threshold for 2018.