"Any team that exceeds the base luxury-tax threshold for three or more consecutive years pays a 50 percent penalty for every dollar it goes above. Any team that exceeds the base threshold by $60 million or more pays an additional 60 percent surcharge, The Athletic's story reads."
"The Los Angeles Dodgers qualify on both counts, so their penalty for signing Tucker or any of the other remaining free agents would be 110 percent. At a $40 million AAV, Tucker would cost them $84 million. At a $35 million AAV, the number would be a mere $73.5 million."
"Not that the Dodgers necessarily care - they paid a record $169.4 million in tax after winning their second straight World Series title. Their signing of free-agent closer Edwin Díaz, whose AAV after deferrals is $21.1 million, will cost them $44.3 million annually."
The Los Angeles Dodgers will pay more than $23 million this season for closer Edwin Díaz and will face heavy luxury tax consequences. Teams that exceed the base luxury-tax threshold for three or more consecutive years incur a 50 percent penalty on overages, and teams exceeding the threshold by $60 million or more pay an additional 60 percent surcharge. The Dodgers meet both criteria, creating a 110 percent effective tax on additional spending and dramatically raising the effective cost of signing high-AAV free agents. The franchise previously paid a record $169.4 million in luxury tax.
Read at Dodgers Nation
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