Obama tax plan concerns agents
Published 1:31 am Wednesday, November 5, 2008
Looking ahead to an Obama administration, some baseball agents already are thinking about trying to beat a possible tax increase for their well-paid clients.
President-elect Barack Obama has proposed increasing the top federal income tax rate from 35 percent to 39.6 percent, where it was under the Clinton administration. If signing bonuses are paid before Jan. 1, they likely would be taxed at the current rate and would not be subject to any tax increase.
‘‘It’s something we’ll consider,’’ agent Craig Landis said Tuesday at the general managers’ meetings. ‘‘Besides the federal issue, we have a state issue in some cases, anyway, where it’s advantageous to take signing bonuses because of the state income tax. A Florida resident can take the signing bonus and not have to pay his team’s state tax.’’
Email newsletter signup
Obama’s proposal would increase federal income tax on families earning more than $250,000 annually, money that would help finance a decrease for workers and families earning less than $200,000 annually.
Next year’s major league minimum is $400,000. Agent Scott Boras, negotiating eight- and possibly nine-figure deals for free agents Manny Ramirez and Mark Teixeira, already has thought about the possibility of asking for larger signing bonuses payable this year in some of his contracts.
‘‘There’s some consideration to be had with the impact of the election,’’ he said.
Free agents can’t start negotiating money with all teams until Nov. 14. Only a relatively small percentage of contracts are finalized before Jan. 1.