Luxury Tax

NEW YORK - Washing away all of the optimism that flowed from the union's decision Monday not to set a strike date, baseball's labor negotiators ran into a reef in their talks last night, almost ensuring that the union will set an Aug. 30 strike date tomorrow. As negotiators for the owners and the players prepared for a third bargaining session of the day, one of them suggested that it was impossible to predict whether they could get to an agreement before the union's executive board meets via conference call tomorrow.

WASHINGTON -- Sprinkling largess among diverse constituencies at the start of an election year, President Bush wants to repeal the luxury tax on yachts and will propose a substantial increase in the federal budget for feeding and vaccinating poor children.Confidential galley proofs of the budget, to be sent to Congress on Wednesday, show that Mr. Bush will also propose a doubling of federal spending to control tuberculosis, as well as a public housing initiative to let tenants oust bad managers.

Boating enthusiasts who hope to repeal a federal luxury tax on new boats have formed a non-affiliated political action committee, the first for the struggling industry.Mick Blackistone, director of the Annapolis-based Marine Trades Association of Maryland, has enlisted 30 state marine trades associations and boat manufacturers and dealersto help overturn a 10 percent tax on new boats costing more than $100,000.The tax, part of a five-year federal deficit-reduction package, already has cost the state jobs, businesses and income generated by sales and income tax, said Blackistone, the Save Jobs in Boating PAC's volunteer chairman.

Negotiations between baseball owners and players slowed perceptibly last night, but it still appears that the 3 1/2 -year dispute that damaged the 1994 and '95 seasons will come to an end soon.Management chief negotiator Randy Levine met with representatives of the Major League Baseball Players Association several times yesterday and early this morning in New York, following up on a negotiating marathon that stretched from early Friday until late Saturday night. The heady optimism that came out of that round-the-clock bargaining session was felt in ballparks all over the major leagues, but the issues under discussion are so complex that it could take many more hours to sort them out.The owners and players apparently have settled on a luxury taxation plan that would penalize large-market teams for heavily outspending their small-market counterparts, but they have spent the past three days trying to settle on the particulars.

CHICAGO - After rejecting the latest league proposal without attempting to negotiate off it, NHL players association executive director Bob Goodenow is rumored to be ready to present the league with another proposal before tomorrow - when most observers expect the league will cancel the rest of the 2004-05 season. It's unlikely any public statements will be made other than to announce a deal or the season's cancellation. But rumors are spreading Goodenow will present NHL commissioner Gary Bettman with a proposal for a deal that may run for as long as eight seasons.

ORLANDO, Fla. -- After "kicking the tires of this deal all spring long," the Atlanta Braves and Cleveland Indians made a stunning trade yesterday that was fueled by the economic concerns of both clubs.The Braves sent two-thirds of their outfield, David Justice and Marquis Grissom, to the Indians for center fielder Kenny Lofton, who is considered the best leadoff hitter in baseball, and relief pitcher Alan Embree.Considering the players and the teams involved, it is one of baseball's biggest trades in years.

PHOENIX - Trying new approaches, Bud Selig and Donald Fehr are attempting to negotiate a labor contract without the acrimony that has led to work stoppages in every previous labor negotiation. But while Fehr's visit to a meeting of major-league owners yesterday was unprecedented, it does not suggest a narrowing of differences. At the conclusion of two days of talks between owners, Selig reiterated his belief that "we need a reform of the economic system." Battle lines are being drawn over the owners' attempts to increase the sharing of local revenues significantly while also instituting a luxury tax on the highest payrolls.

Highlights of the tentative agreement reached by baseball players and owners, as obtained by the Associated Press from player and management sources: Length: After ratification, starts with the 2002 season and runs through Dec. 19, 2006. Luxury tax thresholds:Teams will be taxed on the portions of payrolls above the following thresholds: 2002 - No tax; 2003 - $117 million; 2004 - $120.5 million; 2005 - $128 million; 2006 - $136.5 million Luxury tax rates: First time over threshold: 17.5 percent in 2003, 22.5 percent in 2004 and 2005, no tax in 2006.

Remember that $84,550 signal red Mercedes Benz 560SEC you had your eye on? The one with the palomino leather upholstery? Well, you should have bought it yesterday, because today it will cost about $6,700 more.And how about that $100,000 Russian lynx fur coat you wanted to keep you warm this the winter? Did you forget to drop by your furrier to pick one up? Well, it will cost you more today: about $9,000 more. Same for the 10-karat tennis bracelet priced just under $30,000. As of midnight, the bottom-line price went up almost $2,000.

The Major League Baseball Players Association has yet to respond to an ownership concession on revenue sharing, but management lawyer Rob Manfred expressed guarded optimism yesterday that the negotiations are headed in the right direction. "I'm more optimistic about it moving forward," he said, after reporting progress on several lesser issues. "We had a better day today." The owners and players have one week left to reach a new labor agreement before the Aug. 30 strike date set by the players a week ago. They remain $43 million apart on the revenue-sharing component after the owners reduced the amount they hope to transfer through revenue sharing to $268 million.