Red Sox Are Over Luxury Tax Threshold

4:48pm: The Red Sox are operating under the same parameters that they always have and will make an acquisition if they feel that it could help them make the postseason, according to these tweets from ESPN's Buster Olney. 

12:34pm: Nick Cafardo of The Boston Globe reports that the Red Sox have learned within the last few hours that they have indeed exceeded the 2010 threshold for the competitive balance tax, better known as the luxury tax. They will be taxed at a 22.5% rate for every dollar spent over $170MM this year, and those figures will increase to 30% and $178MM next year, respectively.

Cot's Baseball Contracts, an unofficial source of salary and payroll data, has Boston's payroll at just under $168.11MM this season, though they obviously closed the gap at some point. Josh Beckett's extension was completed after the start of the season in an effort to save against the luxury tax. 

It was reported earlier this week that the Red Sox weren't willing to spend significant money this July in an effort to avoid the tax. Whether or not the team is willing to dip further into their pockets to add pieces at the trade deadline remains to be seen, though they have indicated that they prefer to wait until their injured players return before targeting high-priced players.

The Yankees are the only other team in baseball over the threshold, and they are taxed at a 40% rate because of past payrolls.


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