The Yankees' disappointing 2008 season came with a price tag: a $26.9 million luxury tax bill they were handed on Monday by the Commissioner's Office. The 2008 payroll threshold for luxury-tax liability was $155 million. Having exceeded the payroll ceiling for several years, the Yankees were taxed at the compounded rate of 40 percent over the $155 million.
By comparison, the Tigers, the only other team hit with a luxury tax liability, surpassed the threshold for the first time and were taxed at a rate of 22.5 percent. This newest assessment brings the Yankees' luxury tax total to $148.3 million in the six seasons since it was implemented. That figure represents 90 percent of the total paid into the kitty -- with the only other contributions having been made by the Red Sox (a total of $13.9 million in four seasons) and the Los Angels ($927,000 in 2004). New York was taxed based on a 2008 payroll of $222.2 million but, as recent events indicate, remains as aggressive as ever in assembling the best team possible. The Yankees have begun this offseason already committing $243.5 million to a pair of high-end pitchers, left-hander CC Sabathia and A.J. Burnett. New York made a record luxury-tax contribution of $34 million in 2005. This year's bill represents a slight increase from the 2007 debt of $23.9 million. Detroit was assessed a luxury tax of $1.3 million as a result of the Tigers' $160.8 million payroll. Neither taxed team earned a postseason berth. While the Yankees did close strong to finish with 89 wins, their streak of 13 consecutive playoff appearances ended. The Tigers wound up in the AL Central basement after the high-profile trade for Miguel Cabrera, who was signed in March to an eight-year, 152.3 million extension. The 2008 payroll threshold of $155 million was up from $148 million in 2007. Next year, it will rise to $162 million, then increase by $8 million in 2010 and 2011.
Tom Singer is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.