Please read the following article from espn.com as it affects us all- http://sports.espn.go.com/mlb/news/story?id=3683448
DANA POINT, Calif. — Some baseball agents already are thinking about trying to beat a possible tax increase for their well-paid clients under an Obama administration.
President-elect Barack Obama has proposed increasing the top federal income tax rate from 35 percent to 39.6 percent, where it was under president Bill Clinton.
If signing bonuses are paid before Jan. 1, they likely would be taxed at the current rate and would not be subject to any 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.”
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. It’s also possible more income might be subject to the Social Security tax.
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.
Still, for a big-money free agent earning $10 million in 2009, Obama’s plan could increase his federal tax by more than $400,000.
“I’m sure it will be kicked around,” said Paul Kinzer, who represents free-agent closer Francisco Rodriguez.
Agents generally had thought about the possibility of a tax increase more than the GMs. Many of the club representatives said they likely wouldn’t be able to determine until after Nov. 14 whether beating a tax hike was a trend.
“It’s not off the wall,” said Andrew Friedman, executive vice president for baseball operations of the AL champion Tampa Bay Rays. “We’d certainly be open-minded to it depending on what the rest of the terms of the deal are.”
Also on the first full day of the meetings:
ï Listing some of the Wall Street firms that have fallen, baseball commissioner Bud Selig warned GMs in a video conference about the national economy, mentioning that Bear Stearns, Lehman Brothers and Merrill Lynch have all collapsed or been taken over in the past year.
“We’re living in a tumultuous economic period,” Selig said later in a telephone interview with The Associated Press. “Many economists believe that we’re going to have significant problems. Maybe this could turn out to be the most difficult period since the Great Depression. I view these coming months with trepidation.”
Copyright 2008 by The Associated Press
Let the Obama Bashing begin. I feel like I was duped. Had I known Obama was propsing this tax increase for people earning more than $250,000 a year I would never have voted for him. You mean to tell me Manny Ramirez might have to pay more tax on his new deal?!? How is he suppose to eat? This is ridiculous. These athletes work their asses off and barely get paid 6-8 figures and NOW they are expected to shell out more money because Premier Obama says so. What did we do?!?! How could we have been so stupid. Fox News was right we are about to start living in a Socialist Prison Camp.
I just hope the signing bonuses, you know that 7 figure sum we all get paid just for applying ink to paper at our new jobs, dramatically increase because I am smart and see where this is going. If we continue to dramatically tax these poor athletes, then they will be forced to go on welfare. Soon Manny Ramirez will be getting pregnant just to increase his benefits. Ive seen it a thousand times. Please, everyone join me this Saturday in the CAC parking lot. We are going to march on Washington in a sign that we will not tolerate this Socialist elected prick. In addition I will be leaving a tip jar at the front desk and starting a hotline where you can dig deep and pledge money to help save these athletes from becoming burdens on the nation’s welfare program. Anything you can spare is appreciated. There is no such thing as a small donation…unless you are at a sperm bank