"The Dodgers ended up paying a 50% rate on their first $20 million above the threshold, a 62% rate on the next $20 million, a 95% rate on the $281 million to $301 million and a 110% rate on any amount over that. That means the Dodgers were charged with a record luxury tax just shy of $170 million, according to Ronald Blum of The Associated Press:"
"The Los Angeles Dodgers will pay a record $169.4 million luxury tax after winning their second straight World Series title, raising their two-year tax bill to $272.4 million. In total, the World Series roster cost the Dodgers $586.7 million based on their payroll total and luxury tax, however, the true total is a little different due to luxury tax hit calculations on contracts. The Dodgers paid $456 million for their 2024 World Series, bringing their total over their two championship seasons to $1.04 billion."
"This is also the 10th time the Dodgers have gone over the luxury tax threshold since the Guggenheim Baseball Management Group took control of the club in 2012. Luxury tax funds are used in a variety of ways, with the first $3.5 million going to fund player benefits and 50% of the remainder funding player Individual Retirement Accounts. The other 50% of the remaining total is distributed among teams that receive revenue-sharing money"
The Los Angeles Dodgers won the 2025 World Series with the most expensive roster in MLB history. The competitive balance tax threshold for 2025 was $241 million, while the Dodgers' payroll reached $417.3 million. Five consecutive seasons above the threshold produced escalating surtaxes with rates reaching 110% on amounts past certain brackets. The team incurred a record luxury tax near $169.4 million, producing a 2025 roster cost of $586.7 million when combined with payroll. Combined championship costs for 2024 and 2025 reached about $1.04 billion. Luxury tax proceeds fund player benefits, IRAs, and revenue-sharing distributions.
Read at Dodger Blue
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