The Houston Astros are hated because of it They were deceived. Dodgers don’t cheat. Outside of Los Angeles, they are hated a little more every day.
The supply of money seems endless. So does the All-Star line. But it is the deferred contracts that may anger haters the most.
The defending World Series champions have fortified their roster with a series of “play now, pay later” deals, all under the Collective Bargaining Agreement, all of which give the Dodgers a modest break from luxury taxes. And so, haters wonder, can anyone stop the Dodgers?
Josh Becker would like that. He is a California state senator, a Democrat from Menlo Park. The Dodgers did Deferring more than a billion dollars in salary during the past five years. Every dollar of deferred salary could be a dollar that the state cannot tax.
“The Dodgers are exploiting that loophole,” Baker told me. “It was never intended to be anything remotely like this.”
The loophole is this: Under federal law, if you get paid in one state and retire in another, You may not need to pay income taxes On the salary that you postpone for retirement.
That puts California at risk of losing up to $138 million in revenue due to Dodgers deferrals — $90 million on Ohtani’s contract alone, should he return to Japan or move to another state after his deal expires.
“It takes advantage of something that was supposed to apply to people who have $20,000 or $25,000 in pensions… people who have a small amount of pension, later in life, as an actual retirement,” Baker said. “This is how it was meant to be.
“We have created a system. Others adhere to it. You are essentially evading taxes that others have to pay. It is basic fairness.”
In December 2023, the Dodgers signed Ohtani to a 10-year, $700 million contract. $680 million deferred outside the contract period. Four weeks later, State Comptroller Malia Cohen said the contract demonstrates the need for Congress to limit how much money can be deferred without being subject to taxes.
“This measure will not only create a more equitable tax system,” Cohen said. In a statement“But it also generates additional revenue that can be directed toward addressing important pressing social issues and promoting economic stability.”
Last March, Baker filed invoice who urged Congress to “set a reasonable limit on deferred compensation.” The first line of the bill: “Whereas, in December 2023, the Los Angeles Dodgers baseball team signed pitcher and slugger Shohei Ohtani to a 10-year, $700 million contract.”
Invoice State Senate Survey But he died in the community. Baker withdrew the bill when he realized it would not pass.
California’s income tax rate for high-income earners is 13.3%. The highest in the country. It would make more financial sense for players and others to retire in states like Florida and Texas, where there is no state income tax.
Among the concerns Baker said he’s heard about his bill: Wealthy executives, not just ballplayers, benefit from such deferred compensation.
“They shouldn’t use it either,” he said. “Let’s close the loophole.”
Baker said he may introduce his bill again. His timing could be better. The bill essentially asks Congress to make some people pay more taxes. There is a better chance of winning a World Series this year for the Colorado Rockies than if Congress passes — and President Trump will sign — such a law.
“They’re focused on cutting corporate taxes, rather than making people pay their fair share,” Baker said.
Baker represents a district in the San Francisco Giants territory but grew up in Philadelphia and remains a Phillies fan. He doesn’t really blame the Dodgers. He blames Congress. Shh, but he kind of likes the Dodgers.
“The Dodgers are building a dynasty there,” he said.
