Luxury Tax

The Major League Baseball Players Association has long viewed any kind of luxury tax system as a salary cap in sheep's clothing, but union executive director Donald Fehr drove that point home in a pair of recent memos to players and agents. Fehr called ownership's attempt to increase revenue sharing and institute a huge luxury tax on high payrolls "a wholesale attack on the salary structure," in a recent memorandum to players that was obtained this week by Newsday. If that seems inflammatory, it certainly shouldn't be surprising to anyone familiar with the union's negotiating stance.

NEW YORK - Negotiators for Major League Baseball's players and owners - faced with today's union-imposed strike deadline - were working early this morning trying to hammer out a new labor agreement. Owners and the players association were attempting to reach a compromise on the troublesome luxury tax proposal that has been the major obstacle to a settlement. Union officials contacted player representatives for the 30 major-league clubs by conference call at 11 p.m. to report they were nearing a deal, but they also cautioned that there was still ground to cover overnight to ensure labor peace for another four years.

Here are answers from members of the Maryland Association of Certified Public Accountants to readers' tax questions. The Sun will publish answers through April 15.Q: Last year I purchased some land to build a house in Howard County. The construction loan was made in 1993 but I won't get residency of the house until this year. Can I write off the interest that I've paid on the construction loan for this residence even though it's not my official residence right now?A: Even though the house is not yet your principal residence, you may still be able to deduct the construction loan interest paid in 1993 as home mortgage interest.

Major-league owners have produced some movement in baseball's sluggish labor negotiations with a compromise proposal on revenue sharing, but it seems unlikely that it will provide the catalyst for a new labor agreement. Management lawyers characterized the concession as "substantial," and union leaders indicated that they would likely respond to the proposal in today's negotiations in New York. There may be little chance for a breakthrough, however, until both sides move closer together on ownership's plan to levy a huge luxury tax on the game's highest payrolls.

Major League Baseball suffered staggering losses during the two seasons that were shortened by the players strike, perhaps enough to persuade both parties in the industry's ongoing labor dispute to reach a long-term collective bargaining agreement soon.The 28 major-league clubs lost $702 million, according to figures obtained from the Commissioner's Office by the Associated Press, $376 million during a '94 season that was cut short by two months and $326 million during a 1995 season in which attendance was depressed by fan discontent.

NEW YORK - Major League Baseball's labor dispute has entered a critical phase in negotiations, with the union's upcoming strike deadline threatening to wipe out Friday's games and perhaps the rest of the season. The issues at the heart of the conflict are both complex and troublesome, and what follows are questions and answers to help explain the situation. Why do the periodic collective bargaining talks between the players and owners almost always lead to a strike or a lockout? Because both sides historically have been in constant disagreement over how the revenue generated by the industry should be distributed and spent.

The tug of war between the players and owners has taken on a more conciliatory tone over the past few days, perhaps because some small progress finally is being made toward a new collective bargaining agreement. That's good news for baseball fans, who have become weary of the constant bickering that has characterized the sport's labor relationship for the past 30 years, but there's a long way to go before they can rest easy that another work stoppage will be averted. The movement has been in the area of revenue sharing, one of the core issues that seemed to be pushing the players toward another strike.

Baseball's troublesome labor dispute took a nasty turn yesterday when ownership negotiators reacted angrily to a new proposal from the Major League Baseball Players Association. Union negotiators proffered a phased-in revenue-sharing plan and decreased their luxury tax thresholds by $5 million each, but management lawyer Rob Manfred blasted the proposal as "regressive" and questioned the union's desire to make a deal with just five days remaining before the players' Aug. 30 strike deadline.

Major-league owners delivered a new proposal to the players union yesterday that slightly decreased the annual amount they hope to redistribute through revenue sharing and increased their thresholds for a stiff luxury tax on the baseball's highest payrolls. The new proposal would drop management's proposed annual revenue transfer from $268 million to $263 million and raise the threshold for the luxury tax from $102 million to $107 million for the first three years of the four-year labor agreement and to $111 million for the final year.