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Reason #8,473 why I hate the Yankees

December 24, 2008

The New York baseball club has hammered out an eight-year, $180 million deal with Mark Teixeira.

Yankees-ny slash (2)
Bah the Yankees. Bah Scott Boras. And just plain bah humbug.

OK, I'm not going to let the team that. as noted by New York Times sports scribe Harvey Araton, "in the world of economic pain that has set upon the country, their audacity and gluttony tend to make the stomach feel queasy," spoil my holidays.

So the Yankees get another great player. They still might go yet another year without making it to the World Series or even without playing past the regular season. That would certainly be a belated, but welcome, Christmas gift.

Then there are the taxes: Araton also points out that the pinstriped squad just received a luxury tax bill from Major League Baseball for $26.9 million.

The levy was created to stop excess payroll outlays by big-market teams. In the six years it's been around, the Yankees have said "luxury tax, what luxury tax?" and ponied up a grand total of $148.5 million to MLB.

More to the point for average fans are the city and state tax breaks that the Yankees, as well as the Mets, are receiving for their new stadiums.

"Sure, the city is facing lower tax revenues and will cut from city agencies' budgets," writes the Gothamist. "But when the Yankees and Mets need additional tax-exempt bonds to complete their new stadiums, that's okay!"

The NYC blog cites another Times' article, Tax Shelter Helps Yankees Afford Those Big Salaries, that details the tax costs to the state, the Big Apple and MLB.

First the baseball specific break:

Major League Baseball gives teams a tax shelter that justifies going into debt to build a stadium. Stadium costs, like bond payments and maintenance, can be deducted from the team’s net local revenue that are used to calculate revenue-sharing.

By slashing the revenues that are taxed at a 31 percent rate, the Yankees will be able to shelter a chunk of the money that would have been shared. They paid about $100 million into baseball’s revenue-sharing pool in 2007, but could have received a multimillion-dollar credit if they had had their deductions for the new stadium.

Now to New York and New York, New York, costs. In As Stadiums' Costs Rise, City Agrees to New Bond Offerings, we learn:

The city also plans to issue $341.2 million in additional tax-exempt bonds on behalf of the Yankees and Mets to complete the stadiums, whose combined cost is about $2.2 billion.

The teams are responsible for paying off the bonds, but they pay tens of millions of dollars less in interest because payments to bondholders are exempt from city, state and federal taxes.

The city and the state are also investing more than $660 million in parks, garages and transportation improvements around the stadiums and are providing the teams with an estimated $500 million in tax breaks related to construction materials and other items.

Yep, I guess the Yankees really do prove that nothing spells success, or the hope of it, like excess.

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TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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