The MLB's modern form of luxury tax has been in place since the 2002 collective bargaining agreement. Under the current system, teams would have to pay a percentage of every dollar their payroll exceeded the set threshold. Since 2003, at least one team has surpassed the allotted threshold, with the New York Yankees spending the most in that time frame.
This coming season, the New York Mets are set to pay an estimated $111 million toward their luxury tax bill. After Steve Cohen and the New York front office spent more than $800 million this offseason, the Mets will have a total payroll (salaries plus luxury tax) of $495 million, $100 million more than the second-highest team.
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"The New York Mets current payroll is estimated to be around $384 million. The luxury-tax payments alone will exceed $111 million. Their total payroll projects to be $495 million. The previous max payroll in baseball: less than $350 million. Mets are at almost half a billion." - Jeff Passan
There are three different tax thresholds that determine the rate that teams that exceed the limit will have to pay. In any five-year period, any team whose payroll exceeds the threshold pays the league 22.5% of the fees. If the same team passes the threshold for a second time, the rate jumps to 30%. The tax leaps to 50% if they exceed the limit three or more times.
With the New York Mets set to pay $111 million in taxes entering the 2023 campaign, they are on track to demolish the previous record set by the Los Angeles Dodgers in 2015 when the team paid a luxury tax bill of $43.7 million.
"The highest paid salary ever in mlb was 2015 dodgers (275mil) they got first rounded by the Mets (100mil) Mets have now surpassed the highest payroll ever by 100mil + and doubled the luxury tax…" - Jimmerss53
Who did the New York Mets sign to push their luxury tax bill to $111 million?
Mets owner Steve Cohen has shown his commitment to winning by signing some of the biggest free agents on the open market. Over the course of a historic offseason, New York added Justin Verlander, Carlos Correa, Jose Quintana, Kodai Senga, Omar Narvaez, Jose Peraza and David Robertson while also re-signing Edwin Diaz, Brandon Nimmo and Adam Ottavino to extensions.
Either the 2023 New York Mets will prove that money can buy championships or go down in MLB history as the most expensive failure in league history.
