Dodgers Hit Record $169M Luxury Tax After Back-to-Back World Series

This article digs into how the Los Angeles Dodgers’ record luxury tax bill is shaking up Major League Baseball’s finances. We’ll look at what it means for big spenders like the Mets and Yankees, and how the “Cohen Tax” era is changing the game’s balance.

Let’s break down the numbers, call out the main offenders, and take a peek at where the luxury tax system might go next season.

Dodgers Set Record Luxury Tax Bill After Back-to-Back World Series Titles

The Los Angeles Dodgers have gone all-in with their spending, snagging back-to-back championships—and a luxury tax hit that’s never been seen before.

The team will cough up a jaw-dropping $169.4 million luxury tax after winning its second straight World Series. That’s the largest single-year tax bill in MLB history. Over the last two seasons, the Dodgers’ tax payments have soared to $272.4 million. That’s a wild commitment to staying on top.

What’s fueling that penalty? A massive $417.3 million tax payroll, which shatters previous records. This number doesn’t just lead the league this year—it puts the Dodgers ahead of the Yankees for most luxury tax paid since MLB rolled out the system in 2003.

Dodgers Overtake Yankees as MLB’s Biggest Tax Spenders

The Yankees used to be the face of luxury tax spending for close to twenty years. Now, the Dodgers have edged them out.

Los Angeles keeps crossing the highest thresholds, year after year. They treat the tax more like part of their operating costs than a deterrent. Sure, that approach has brought them trophies, but at a staggering financial cost.

Mets, Yankees, and the “Cohen Tax” Era

The Dodgers might grab this year’s spotlight, but they’re not the only ones writing huge checks to MLB. The New York Mets and Yankees are still very much in the thick of the tax game, especially with the new, stricter rules.

The Mets finished second in this year’s penalty race with a $91.6 million luxury tax bill. And that happened in a season where they didn’t even make the playoffs. Under Steve Cohen, the Mets have pushed payroll limits, running up a four-year tax total of $320.3 million.

The Cohen Tax: MLB’s Highest Threshold

The 2022 labor deal added a fourth, highest tax tier—unofficially called the “Cohen Tax”. The Mets’ spending pretty much inspired it. This tier targets teams that blow past the standard lines with punishing, climbing tax rates.

This season, four teams crossed that line:

The Yankees owed $61.8 million in luxury tax, and the Phillies got hit for $56.1 million. All four have now paid the tax for four straight years. They’re the league’s most reliable big spenders, for better or worse.

League-Wide Luxury Tax Totals Hit New Highs

The luxury tax isn’t just a big-market problem anymore. It’s spreading out across MLB.

This season, nine teams paid the luxury tax, tying the record set in 2024. The total hit an MLB-best $402.6 million. More front offices are willing to risk going over the line if it means a shot at winning.

Who Paid What? From Heavyweights to Light Spenders

After the Dodgers, Mets, Yankees, and Phillies, a few other teams wrote smaller—though still hefty—checks.

Meanwhile, teams like the Miami Marlins and Chicago White Sox stayed near the bottom of tax payrolls. They’re sticking to leaner budgets and keeping far away from the luxury tax line.

Superstars, Perks, and Record Tax Salaries

Big-name contracts these days aren’t just about salary—they come with perks that count toward the tax, too.

For the Dodgers, Shohei Ohtani’s deal includes nearly $950,000 in noncash benefits, nudging their tax number even higher. Over in New York, Juan Soto’s Mets contract features suites, premium tickets, and extra security, which help push his tax salary to a record $51.8 million.

Why Extra Benefits Matter in the Tax Game

These extras aren’t just nice-to-haves—they’re part of what pushes teams over the tax threshold. Once you add up bonuses, amenities, and long-term promises, the tax payroll can easily outpace the headline contract numbers fans usually see.

What’s Next: Rising Thresholds, Harsher Penalties

Luxury tax rules keep shifting, and next season will bring changes that could shake up spending again.

The first tax threshold will bump up to $244 million, giving teams a little more room before the penalties start. But for clubs that keep going over the higher tiers, the rates could reach as high as 110% on dollars spent above $304 million. That’s a steep price for chasing wins.

Two Decades In, the Tax Is Bigger Than Ever

Since 2003, MLB has collected more than $1.63 billion in luxury taxes. Right now, the Dodgers, Mets, Yankees, and Phillies are all paying up for four straight seasons.

This is easily the boldest spending stretch the league’s seen. Will these sky-high bills really slow down the big spenders, or just turn into another cost for baseball’s wealthiest teams?

Whatever happens, it’s bound to shake up the balance of power and the business side of the sport for a long time.

 
Here is the source article for this story: Dodgers lead MLB with record $169M luxury tax