Dodgers: The Dodgers Luxury Tax Goal Was Accomplished

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LOS ANGELES, CA - APRIL 28: Andrew Friedman, President of Baseball Operations, and Stan Kasten, President, and part-owner of the Los Angeles Dodgers talk with Cody Bellinger
LOS ANGELES, CA - APRIL 28: Andrew Friedman, President of Baseball Operations, and Stan Kasten, President, and part-owner of the Los Angeles Dodgers talk with Cody Bellinger /
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The Dodgers obvious goal is to win a World Series title in 2018.  Besides that they also wanted to stay under the luxury tax threshold to reset their penalties.

The Dodgers had two goals they set out to accomplish in 2018.  The first one is to win the World Series, which remains a work in progress with approximately two weeks left in the regular season.  Their second goal was to stay under the luxury tax threshold of $197 million to reset their penalties for consecutive years above the threshold before this year’s mega free agent class.

It appears that the Dodgers have accomplished their secondary goal for this season as they are currently at about $182 million dollars and while that number will go up when players meet incentives, it will not go up more than fifteen million dollars.  One of those players is Kenta Maeda who will meet at least one of his innings completed incentives.

MLB’s luxury tax threshold does increase each season and next year is the biggest jump for a while as the threshold increases from $197 million to $206 million.  So why did the Dodgers care so much about resetting their tax penalties?  After three consecutive seasons exceeding the threshold, the Dodgers would have to pay a 50% tax for every dollar they are over the tax threshold.

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By resetting their penalties this season, that number will now be a 20% tax for the Dodgers if they go over the luxury tax threshold next season.  It basically buys the Dodgers a few seasons they can go over the the threshold without paying a whopping 50% tax and there were rumors that MLB mandated the Dodgers to comply with the tax threshold.

The other penalty for exceeding the tax threshold by $40 million or more this season is the loss of draft pick position.  The Dodgers’ front office is all about keeping a strong farm system and developing their own talent rather than always spending big bucks and possibly running into free agent busts.  They would rather pay money than lose draft pick position, but by cutting their payroll, they won’t have to worry about any draft pick issues next year.

Now that the Dodgers have successfully completed their secondary goal for the 2018 season, their main goal is right in front of their faces.  The Dodgers are currently playing the two teams ahead of them in the wildcard and NL West playoff races.  If the Dodgers want to try and achieve their goal of winning the World Series, they need to start winning and scoring consistently.

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Once this season conclude the Dodgers will face one of their most interesting off-seasons in a while. Clayton Kershaw will likely opt out of his deal becoming a free agent, and Yasmani Grandal will also become a free agent while the Dodgers catching prospects don’t appear to be ready for the show.  Thanks to successfully staying under the luxury tax threshold, it appears to be a go big or go home type off-season for the Dodgers.

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