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The Dodgers' high payroll and repeated violations of the CBT threshold led to a 50% base tax rate, along with additional surcharges. The team was taxed at a 50% rate on the first $20 million above the threshold, 62% on the next $20 million, 95% on the amount from $277 million to $297 million, and 110% on the total above $297 million.
This record-breaking luxury tax payment is part of a broader trend, as a total of nine MLB teams were charged for exceeding the CBT threshold in 2024, resulting in a combined total of $311 million in penalties. Other teams that faced luxury tax penalties include the New York Mets, New York Yankees, Atlanta Braves, Texas Rangers, Houston Astros, Philadelphia Phillies, San Francisco Giants, and Chicago Cubs.
The luxury tax funds are distributed according to the collective bargaining agreement, with the first $3.5 million funding player benefits, half of the remaining sum going to player retirement funds, and the other half being redistributed among teams that receive revenue sharing.
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