California Official Wants Shohei Ohtani To Pay Higher Taxes On His $700 Million Contract

John Simmons | January 10, 2024
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A high-ranking California official wants the state to pass a law that would require Los Angeles Dodgers star Shohei Ohtani to make increased tax payments on his record-shattering contract.

During the MLB offseason, the Dodgers signed the Japanese pitcher and designated hitter to an astounding 10-year, $700 million contract. It’s (unsurprisingly) the most expensive contract for any athlete in history, and shattered the previous MLB contract record (which was 12-years at $426 million for Ohtani’s former teammate, Mike Trout).

But there’s a catch: Ohtani will have to wait a while to get the majority of that contract.

Thanks to some incredible financial finessing, the Dodgers will only pay Ohtani $2 million per year over the next decade. Once his contract expires after the 2033 season, Los Angeles will pay him $68 million annually from 2034-2043 in a series of deferred payments. Ohtani reportedly suggested the idea so that the Dodgers could afford to sign other stars and build competitive rosters during his playing days.

However, California State Controller Malia Cohen, who chairs the state's Franchise Tax Board, doesn’t like that. 

Cohen’s job involves overseeing all of The Golden State’s financial maters. As such, she sees an opportunity to gain some extra money through California’s incredibly high income tax - which is 14.4 percent for the state’s highest earners.

“The absence of reasonable caps on deferral 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 rectify this imbalance,” Cohen said in a public statement. “Introducing limits on deductions and exemptions for high-income earners … would not only create a more equitable tax system, but also generate additional revenue that can be directed towards addressing pressing important social issues and fostering economic stability.”  

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Cohen is upset about “income inequality” in this situation. She seems to think that athletes should feel bad for earning more than most people in America.

While $700 million does seem over the top for playing a sport, it’s not all that unfair. There’s a lucrative market - the baseball entertainment industry - that demands the unique skillset Ohtani provides. As such, if that market can afford to pay him that much for his hard work and talents, they should be able to. That’s capitalism: a person’s talents meet an opportunity, and you earn what that market can provide. Some markets are just more lucrative than others.

Furthermore, the Dodgers operated within the framework for players' contracts that the MLB set. They may have doomed their franchise to financial ruin in about a decade, but it’s a risk they can legally take. 

But Cohen is worried that once Ohtani starts getting the deferred payments, he’ll move to another state where he won’t have to pay as high a tax rate on his earnings. She doesn’t want to miss that opportunity to get as much of Ohtani’s contract as she can. 

This, in short, is communism: taxing the rich in the name of equality and fixing social issues.

However, Cohen did not say what these social issues are. Furthermore, California’s government is doing a pretty terrible job of creating a viable economy, clean cities, or safe places for citizens as it is. If they can’t fix these problems with their current tax income, getting money from Ohtani’s contract won’t change anything.

Taxpayers Protection Alliance policy analyst David McGarry said that Cohen’s reaction to Ohtani’s contract is a microcosm of a big problem in the state’s government.

“The issue at play is far more fundamental than any athlete’s contract. It is systemic to how California chooses to govern. The state has constructed a burdensome tax code that chases citizens — especially the high earners  — from the state,” McGarry said. “These shortcomings have become painfully obvious in migration statistics as native Californians depart in search of lighter regulation and lower tax rate.”

Ohtani’s contract is not a trust fund that Cohen and her California cohorts can dip into whenever they want. If they truly want to create a better life for their citizens, they should stop acting like communists as soon as possible.

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