Document Type


Publication Date



In lieu of an abstract, here is the article's first paragraph:

In the most recent collective bargaining agreement between Major League Baseball (“MLB”) and the Major League Baseball Players Association (“MLBPA”), the word “tax” appears 114 times. Some of these references pertain to MLB’s competitive balance tax.1 First implemented in 2003 in lieu of a salary cap, the competitive balance tax is a three-tiered penalty assessed annually on teams with payroll exceeding a specified amount, or the “base tax threshold.” 2 The assessment increases for each consecutive year the team exceeds the threshold, up to a maximum penalty of fifty percent of the excess.3 In addition, MLB imposes a surcharge on each $20 million increment by which the team exceeds the threshold, up to an excess of $40 million.4 These additional surcharges can drive the total assessment up to ninety-five percent of the excess.5


This article was originally published as:

Kari Smoker, Alan Pogroszewski, Kyle Stich & Kevin Arnold, Pandora's Box Enters the Batter's Box: How the Tax Cuts and Jobs Act's Unintended Consequence Places MLB, and All North American Leagues, in Tax Chaos, 26 Jeffrey S. Moorad Sports L.J. 291 (2019).

Available at:

Additional Files