Look Out For Signing Bonuses

With the election of Obama and the promise of higher taxes for top earners that accompanies it, Scott Boras and his fellow agents may be looking to (a) get their free agent clients signed early; and (b) get a decent portion of that money in the form of signing bonuses:

Democratic presidential candidate Barack Obama has proposed increasing the top federal income tax rate from 35 percent to 39.6 percent, where it was under the Clinton administration. If signing bonuses are paid before Jan. 1, they likely would be taxed at the current rate and would not be subject to any tax increase.

"It's something we'll consider," agent Craig Landis said Tuesday at the general managers' meetings. "Besides the federal issue, we have a state issue in some cases, anyway, where it's advantageous to take signing bonuses because of the state income tax. A Florida resident can take the signing bonus and not have to pay his team's state tax" . . .

. . . Free agents can't start negotiating money with all teams until Nov. 14. Only a relatively small percentage of contracts are finalized before Jan. 1. Still, for a
big-money free agent earning $10 million in 2009, Obama's plan could increase his federal tax by more than $400,000.

"There's some consideration to be had with the impact of the election," said Paul Kinzer, who represents free-agent closer Francisco Rodriguez.

No word if Obama's health care proposals wil change how teams use the disabled list.