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simonus

effect of luxury tax on the MLB

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http://sports.espn.go.com/mlb/news/story?id=1953986

generally interesing article. Goes over the stats for the luxury tax and salary rates in the MLB this year.

One interesting thing to note - in the second year of this oft-considered weak luxury tax, the average player salary is down 2.5%

3 teams now get taxed - nyy, red sox, angels. Next year prob mets and cubs get taxed as well.

Thought this might be interesting to us as we discuss methods by which to increase economic parity across the NHL.

[Edited on 2004-12-29 by puck7x]

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Yeah, I read some of those in the Sun today.

The problem I have with a luxury tax is this: the Yankees have to pay 30,000,000 approx. in tax...that's about 1,100,000 per team. For them to have to pay 30,000,000 in tax they were about an extra 75 million in payroll over the cap(correct me if I'm wrong here...). That's about 5 highly impactful players(assuming 15 million a year types). So at the end of the day the Yanks could sign 5 guys, similar in value to a Beltran or Schilling, and give every team in the league a million bucks to sign a crap player. How is this a system that truly works??

Also keep in mind that the Yanks also have to pay a tonne of money for the revenue sharing plan...which you wouldn't see in hockey.

Even if you were to triple the penalty clauses in the luxury tax the Yanks are still WAY ahead. Even if you suppose they have a budget, and they do though they still have room, they'll still be signing 3-4 of those impact players while paying only a few million to the other teams. It slows them down a little but doesn't offer enough of a disincentive for them to spend the money over the tax limit.

I know baseball salaries dropped on average BUT we can easily see this year that this trend is quickly being reversed. Christ, Eric Milton just signed a 3 year $25.5 million deal...that's 8.5 million a year for a guy who had an ERA of 4.75 and has never been a high end starter. There's been loads of these types of signings this off-season.

[Edited on 2004/12/28 by Zowpeb]

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luxury tax isn't the solution. it's weak.

maybe the NHL should adopt a system like Roenick said. Only allow, for example, each team to have a maximum of three players earning over $5 mil, than a certain amount of players earning between 2.5 and 4.9 mil, and so on...

[Edited on 2004/12/29 by Leafs Suck]

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