Baseball Players Make Tax Offer to Owners

As the central component of a bargaining proposal made to negotiators for major league baseball owners on Wednesday, the players’ union has offered to put a 2.5% tax on all player salaries during the first three years of a six-year agreement to generate about $25 million a year that would be donated to the owners’ revenue-sharing fund.

According to sources close to the negotiations, the proposal calls for the salary tax to be followed by a two-year tax of 25% on payrolls above $50 million, with the tax increasing to 30% in the final year of the agreement if industry revenue reaches $2.7 billion, which is considered unlikely.

A management source said the payroll tax is not restrictive enough to inhibit salary growth and the tax on salaries is acceptable only if combined with a more restrictive payroll tax. However, the source said, “The union has at least kept the [payroll] tax on the table and there is a framework for agreement on revenue sharing. The union has also made progressive proposals on free agency and arbitration. We may not be that far apart in those areas.”

The 1996 season will be played under rules of an agreement that expired two years ago. Negotiators and players have now exchanged proposals for the first time in nearly a year. Management sources said they will counter the offer within two weeks.