Japan’s Masahiro Tanaka will only bank about half of his original contract deal with the New York Yankees.
The Yankees signed Tanaka on Wednesday with a promise of $155 million over the next 7 years, the largest contract deal ever signed by an international free agent, as reported by ESPN.
According to a study done by Americans for Tax Reform, after the combined effect of federal taxes in addition to New York’s steep state and local taxes, Tanaka will have an estimated 56.1 percent income tax rate, leaving his actual salary at $68 million for the length of his contract.
After an impressive 24-0 record last season, the pitcher was in high demand and could have signed with the Arizona Diamondbacks or the Chicago Cubs, both located in cities with lower taxes than New York.
Signing with the Yankees rather than these franchises cost him about $12 million, according to the study.
But Takana’s move to the states wasn’t solely about monetary gain. For him, winning was the larger motivation, which is why he thought the Yankees would be the best choice.
“I’m going there to win the World Series,” Tanaka told the New York Post. “I can’t wait to get to the Pitcher’s mound at Yankee’s Stadium.”