The Luxury Tax in Baseball

[Nyi28nhl]

NEW YORK - The New York Yankees lowered spending on players by $12 million this year, cutting payroll by $5 million and slashing their major league-leading luxury tax by more than $7 million.

New York was hit with an $18 million luxury tax Tuesday by Major League Baseball. The tax was New York's lowest since 2003 and down from $25.7 million last year, when the Yankees won the World Series.

Boston is the only other team that will have to pay. The Red Sox, who missed the playoffs this year, exceeded the payroll threshold for the first time since 2007 and owe $1.49 million.

nbcsports.msnbc.com/id/40771854/

[MxT13]

As fiscally conservative as I am, I still love the baseball luxury tax. It does very little to actually curtail the spending of an organization like the Yankees, since $18 million to them is like buying a new television for us, but it still acts as a small slap on the wrist for out-spending everyone else.

I would've loved to see how much their tax would have been had they been able to sign Lee and Werth or Crawford. I do find it a little sad, however, that it seems the Yankees need to have an astounding tax burden in order to win anything.

[Nyi28nhl]

I wouldn't say the Yankees are incapable of winning without the luxury tax burden. If you look at those 90s championships they had the highest payroll, but barely. In 1996 there were four other teams within $10M of them. In 1997 it was five other teams. It wasn't until 1999 that they started pulling away, and even then they were only $8M or so ahead of the second highest payroll.

I don't think it's a coincidence that they have only won one championship since they really pulled away in payroll. They just haven't spent the money wisely.