New York Mets owner, Steve Cohen, is facing a daunting luxury tax bill of nearly $101 million after the team's disappointing fourth-place finish in the NL East division during the 2023 season. The staggering tax payroll of $374.7 million, as finalized by Major League Baseball on Thursday, makes the Mets the highest-taxed team in baseball history, surpassing the previous record set by the 2015 Los Angeles Dodgers at $291.1 million.

The Mets' massive tax bill comes as a result of their underwhelming performance, with a 75-87 record. This marks a significant increase from the previous record-high luxury tax payment of $43.6 million by the Dodgers in 2015. Despite a summer selloff that saved the team an estimated $18 million, with notable trades involving Max Scherzer, Justin Verlander, David Robertson, and Mark Canha, the Mets' projected tax payroll on June 30 was $384 million.

Fortunately for the Mets, they received a tax credit of $2,126,471 under a provision in the latest collective bargaining agreement, which helped slightly reduce their overall tax liability. Nevertheless, their two-year tax total now stands at a staggering $131.6 million.

The Mets are not alone in owing substantial luxury tax payments. Seven other teams are also facing penalties for the 2023 season. The San Diego Padres owe $39.7 million, the New York Yankees owe $32.4 million, the Dodgers owe $19.4 million, the Philadelphia Phillies owe $6.98 million, the Toronto Blue Jays owe $5.5 million, the Atlanta Braves owe $3.2 million, and the World Series champion Texas Rangers owe $1.8 million. It is worth noting that the Blue Jays, Braves, and Rangers are paying luxury tax for the first time.

Among the teams, the Yankees and Mets are the only two to exceed the fourth threshold of $293 million, which was added in the 2022 labor contract. This threshold, known as the Cohen Tax, was specifically implemented to curtail the spending power of Mets owner Steve Cohen.

This year's luxury tax totals reached a record-breaking $209.8 million, more than double the previous high of $78.5 million paid in 2022. The total spending on luxury tax payrolls surged by 12.2%, reaching a staggering $5.79 billion compared to $5.16 billion the previous year.

Moving forward, the luxury tax thresholds for the 2024 season have been set at $237 million. If the Mets, Yankees, Dodgers, Padres, or Phillies exceed this threshold, they would be subject to even higher tax rates, with the tax rate potentially rising to 110% for amounts over $297 million.

The luxury tax funds collected by MLB are allocated towards various purposes. The first $3.5 million is used to fund player benefits, while 50% of the remaining amount is allocated to fund player Individual Retirement Accounts. The remaining 50% goes into a supplemental commissioner's discretionary fund, intended to support teams that receive revenue-sharing money and have demonstrated growth in non-media local revenue over several years.

The Mets, along with the other teams facing luxury tax penalties, now face the challenge of managing their payroll while striving for on-field success in the upcoming seasons. The consequences of exceeding the luxury tax threshold can impact a team's financial flexibility and ability to make impactful roster moves. Only time will tell how these teams navigate the fine line between competitive spending and the constraints of the luxury tax system.