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Agents ponder beating potential tax increase

Tuesday, November 4, 2008


AP Baseball Writer

DANA POINT, Calif. -- Looking ahead to the possibility of an Obama administration, some baseball agents already are thinking about trying to beat a possible tax increase for their well-paid clients.

Democratic presidential candidate Barack Obama has proposed increasing the top federal income tax rate from 35 percent to 39.6 percent, where it was under the Clinton administration. If signing bonuses are paid before Jan. 1, they likely would be taxed at the current rate and would not be subject to any tax 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 annually.

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.

"There's some consideration to be had with the impact of the election," said Paul Kinzer, who represents free-agent closer Francisco Rodriguez.

With the general election Tuesday, many of the GMs said they had voted by absentee ballot. New York Mets general manager Omar Minaya said he could predict whether his counterparts supported Democrats or Republicans.

"I'm working out, I'm at the gym, I'm looking around, everyone's watching TV," he said. "And you can tell: A guy would be on the Fox channel, somebody would get off (the machine), and the other guy would just switch right to CNN. Or somebody would be on CNN, and the other guy would go like, OK, 'I'm not watching this stuff."'

Minaya, who worked for the Texas Rangers when George W. Bush was controlling owner, said some of the GMs also turned to MSNBC.

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."

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