Shohei Ohtani’s record-breaking contract with the Los Angeles Dodgers is prompting California to call for a potential change in the tax code.
Ohtani signed a $700 million contract with the Dodgers in early December 2023, but a majority of that money will be paid years later. According to NBC Los Angeles, $680 million of his contract will be distributed in deferred payments due from 2034-43.
On Monday, California Controller Malia Cohen asked Congress to cap deferred payments, ABC 7 Los Angeles reports. She says it provides a loophole that will enable to Ohtani to pay less taxes.
“The current tax system allows for unlimited deferrals for those fortunate enough to be in the highest tax brackets, creating a significant imbalance in the tax structure,” Cohen said, according to ABC 7 Los Angeles. “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.”
Data from the California Center for Jobs and the Economy suggests that Ohtani could save $98 million in taxes, NBC Los Angeles reports.
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