The Phillies officially owe $6.98 million for MLB's competitive balance tax overrun in 2023, according to News agency.
Eight teams will have to pay the CBT tax, often referred to as the luxury tax.
The harshest penalty ever goes to the Mets, who must pay just under $101 million, breaking the previous record of $43.6 million set by the Dodgers in 2015.
Eight teams, the most ever, exceeded the initial $233 million tax threshold:
• Mets: More than $100.8 million
• Padres: $39.7 million
• Yankees: $32.4 million
• Dodgers: $19.4 million
• Phillies: $6.98 million
• Blue Jays: $5.5 million
• Braves: $3.2 million
• Rangers: $1.8 million
As you can see, some financial penalties are very different from others. This is because there are four levels of penalties (more than $233 million, more than $253 million, more than $273 million, and more than $293 million) and they are severe for repeat taxpayers. The Phillies finished around $256 million.
This was the second year in a row that the tax was imposed on the Phillies, Mets and Yankees, who pay 30% on their raises instead of the 20% paid by first-time players — the Blue Jays, Braves and Rangers.
Like Texas, Atlanta and Toronto, the Phillies had a relatively low tax bill of less than $7 million. The four teams paid between $1.8 million and $6.98 million, which is essentially the cost of a decent veteran reliever.
A year ago, the Phils' tax was just under $2.9 million.
The Mets were the hardest hit after exceeding the top tax cap of $293 million, and ending up with a final CBT payroll of $374.7 million. For the $60 million-plus completion above, they also pay an additional fee of 60% of every dollar between $293 million and $374 million.
Additionally, the Mets' first-round pick in the 2024 draft will be moved back 10 spots.
In total, MLB has collected just under $210 million from the eight taxpayers, money that will be used to fund player benefits and individual player retirement accounts with the other half distributed to qualifying revenue-sharing teams.
The luxury tax threshold increases during each year of the current collective bargaining agreement, which expires after 2026. It is $237 million in 2024, $241 million in 2025, and $244 million in 2026.
The Phillies as currently built are on the luxury tax threshold for 2024, though exact numbers are calculated at the end of the season. They still expect to add at least one more player and a fourth player this winter and could get more money at the trade deadline if they are a promising prospect.
The Dodgers, Mets and Yankees all expected their payrolls to be between $40 and $50 million higher than the Phillies.
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