The new market inefficiency is spending money on talent, and there isn’t an organization spending more money on players than the Dodgers. As of Sunday, the Dodgers would be charged a 20% tax on overages up to $20 million, another 12% on overages between $20 million and $40 million, and a 42.5% tax rate on all the overages beyond that. But they aren’t, at least not in relation to the money teams spend. Based on a Roster Resource estimate, the slightly more expensive of the two, the Dodgers’ tax bill as first-time offenders would be about $13.3 million. AdvertisementThe breakdown: $4 million in taxes for the first $20 million over $210 million, $6.4 million in taxes for the next $20 million, and $2.9 million in taxes for being over $250 million in payroll.

Source: Los Angeles Times February 14, 2021 21:31 UTC