NEW YORK (AP) -- The amount of luxury tax each team would pay under the tentative
deal agreed to by players and owners if their payrolls remained at
the same figures that are estimated for 2002 (all figures in millions):
Baseball Luxury Tax, 2003-06
The luxury tax provisions agreed to Friday by baseball owners and players. The tax will be levied on the portion of a team's payroll above a threshold, and the tax rate for a team would vary depending on the number of times it exceeded the threshold. Figures for thresholds are in millions of dollars. Figures for rates are in percent).
Threshold (Figures in millions of dollars)
2003
2004
2005
2006
117
120.5
128
136.5
Tax Rate (Figures are percentages)
1st time
2nd time
3rd time
4th time
2003
17.5
2004
22.5
30
2005
22.5
30
40
2006
0
40
40
40
Note: Payrolls calculated using average annual values of contracts of players on 40-man rosters, earned bonuses and $9 million per team for benefits.
