California comptroller requests cap on deferred payments

Following the contract between Japan's Shohei Ohtani Corporation and the Los Angeles Dodgers, California State Comptroller Malia M. Cohen asked Congress to reform the cap on deferred payments.

Sacramento, California – observer to California, Malia M. CohenHe wants it Congress reforms the tax code to Establishes a Stop to Deferred changesThis is a change that would give the state more money an agreement Which Shohei Ohtani signed.

Cohen made the request four weeks after Ohtani and the Los Angeles Dodgers reached an unprecedented 10-year, $700 million deal, which includes $680 million in deferred payments to cover the period from 2034 to 2043.

If Ohtani does not reside in California at the time he receives the deferred funds, he can avoid income tax, which is currently 13.3% in the state, and payroll tax, which is 1.1% for disability insurance.

“The current tax system allows unlimited deferral of payments for those fortunate enough to be in the highest tax brackets, creating a significant imbalance in the tax structure,” Cohen said in a statement. “The lack of reasonable limits on deferred payments to the wealthiest individuals exacerbates income inequality and impedes the equitable distribution of taxes. “I would urge Congress to take immediate and decisive action to correct this imbalance.”

The Los Angeles Times was the first to report Cohen's statement.

Ohtani's deal has the potential to save $98 million in state taxes, according to the California Employment and Economic Center, a public benefit corporation that seeks to provide information on job creation and economic trends.

Cohen assumed the position of auditor last year. He chaired the San Francisco Board of Supervisors in 2018 and 19.

He commented: “Setting limits on deductions and exemptions for those who earn the greatest amount of income enhances social responsibility and contributes to a fair and beneficial tax system for all.” “Not only will this action create a more equitable tax system, it will generate additional revenue that can be directed to addressing important social issues and promoting economic stability.”