Shohei Ohtani contract: State comptroller urges Congress to act on delay

LOS ANGELES, CA – DECEMBER 14: The Los Angeles Dodgers introduce Shohei Ohtani as the team’s newest member during a press conference at Dodger Stadium in Los Angeles Thursday, December 14. August 14, 2023 The Dodgers signed Ohtani to a 10-year, $700 million contract in a blockbuster free agency signing. (Wally Skalij / Los Angeles Times)
(Wally Skalij/Los Angeles Times)

Shohei Ohtani contract: State comptroller urges Congress to act on delay

California Politics

Bill Shaikin

January 8, 2024

Congress should narrow a loophole that could spare Shohei Ohtani from paying tens of millions in California taxes, the state comptroller said Monday.

The Dodgers signed Ohtani to a 10-year contract worth $700 million last month, with Ohtani deferring $680 million until after the contract expires in 2033.

By then, Ohtani could have returned to Japan or moved elsewhere outside California, where he might not be liable for state taxes on the deferral. That could cost the state an estimated $98 million in tax revenue, according to the California Center for Jobs and the Economy.

A $1 billion blessing? How Dodgers Shohei Ohtani’s contract could make MLB financial kings

The current tax system allows indefinite deferrals for those fortunate enough to be in the highest tax brackets, creating a significant imbalance in the tax structure,” Comptroller Malia Cohen said in a statement on Monday. The lack of reasonable deferral limits for the wealthiest individuals exacerbates income inequality and hinders the fair distribution of taxes. I would urge Congress to take immediate and decisive action to correct this imbalance.

Introducing limits on deductions and exemptions for high-income earners promotes social responsibility and contributes to a tax system that is fair and beneficial to all. This action would not only create a more equitable tax system, but also generate additional revenues that can be spent on addressing pressing key social issues and promoting economic stability.”

If you had “fans calling for Major League Baseball intervention” on your Hot Stove bingo card in the wake of the Dodgers’ billion-dollar winter of Ohtani, Yoshinobu Yamamoto, Tyler Glasnow and Teoscar Hernndez, you win. But no surprise there.

If your Hot Stove bingo card said “State Controller Calls for Congressional Intervention,” congratulations. You are a seer.


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