#1 Yankees Pitcher To Lose Over Half of $155 Million Contract to Taxes by Cincinnatus 24.01.2014 00:29

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This is a story of two parts. Part one: More power to him but the amount of money this guy is getting is obscene. Part two: The even more obscene amount of taxes he will have to pay.

"As reported by ESPN, the New York Yankees have signed Masahiro Tanaka to a 7-year contract worth $155 million, earning an estimated $22.1 million per year. According to ESPN, Tanaka's contract is the largest ever for an international free agent and the fifth-largest deal for a pitcher. However sweet this $155 million dollar deal seems, the reality is that Tanaka will lose almost $90 million over the 7-year life of his contract with the Yankees.

In addition to the Yankees, Tanaka was also being courted by the Arizona Diamondbacks and the Chicago Cubs. Unlike New York City, the cities of Phoenix and Chicago do not impose a city income tax. Had Tanaka chosen a contract with the Diamondbacks or the Cubs, he would have saved almost $12 million over the life of his contract. Instead, Tanaka chose New York, where the state and local rates are some of the highest in the country. By choosing to sign with the Yankees, Tanaka automatically forfeited almost $12 million in taxes that would have been saved had he signed with the Cubs or Diamondbacks.

Tanaka will pay a combined marginal income tax rate of 56.1 percent - over half of his contract. For New York state and local taxes alone he will lose an estimated $2,811,257 a year. The combined marginal income tax rate Tanaka will pay is comprised of the federal, state and local tax rates, plus the Medicare payroll tax."

http://www.atr.org/yankees-pitcher-lose-...f-million-a8085

#2 RE: Yankees Pitcher To Lose Over Half of $155 Million Contract to Taxes by Frank Cannon 24.01.2014 02:17

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Let's not forget that the different cities he plays in could also ask for a cut of this for tax. NYC though is by far the worst.

BTW, the Yankees SUCK!

#3 RE: Yankees Pitcher To Lose Over Half of $155 Million Contract to Taxes by ThirstyMan 24.01.2014 07:54

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Wow! 56% who knew? That's worse than winning money through a game show! or the lottery. Hard to believe.

But why is this getting press now and why this guy? What's up?

Wouldn't this be the same for every Yankee?

#4 RE: Yankees Pitcher To Lose Over Half of $155 Million Contract to Taxes by Cincinnatus 24.01.2014 16:06

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But why is this getting press now and why this guy? What's up?

I suspect this is getting press attention for several reasons. First and foremost Tanaka is Japanese and he has just signed for the highest amount any player from Japan has ever received. Then there's the amount of the contract and the fact this is a topical (current) issue.

My memory tells me that earlier another player chose not to sign with the Yankees precisely because of NY's taxation policies, but I can't remember who it was. Why this fellow Tanaka didn't receive better financial advise is beyond me, though maybe he figured he will be getting plenty of bucks anyway and playing for the Yankees is what he considers a status issue. I dunno but seems reasonable.

Then, of course, there is this, which is impossible to refute: BTW, the Yankees SUCK!

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