Golfer Phil Mickelson Teed Off Over Taxes

PHOTO: Phil Mickelson is seen in action during the final round of the WGC HSBC Champions at the Mission Hills Resort, Nov. 4, 2012 in Shenzhen, China.
Share
Copy

First he protested; now he's apologized: Phil Mickelson, estimated by Forbes to be the highest-paid golfer after Tiger Woods, on Sunday said ominously that he would have to make "drastic changes" in light of the fact that the State of California had recently jacked up his taxes, and because he was in the "zone" of rich folk being "targeted both federally and by the state."

Mickelson is not the first high-profile American to consider taking drastic action in response to higher taxes.

Eduardo Saverin, one of Facebook's co-founders, last year renounced his U.S. citizenship. So did socialite Denis Rich. Enough like-minded rich are apparently flirting with the idea that the Wall Street Journal ran a headline asking "Should You Renounce Your U.S. Citizenship?"

Read: French actor Gerard Depardieu fled France's 75 percent tax rate and gained citizenship in Russia.

Mickelson's remarks, which weren't specific about what he might do, earned him approving cheers (for having had the bravery to protest higher taxes) and also derisive hoots (for being a whining rich guy who gets paid a fortune for playing golf).

In response, Michelson issued a statement Monday that said in part: "I apologize to those I have upset or insulted and assure you I intend to not let it happen again." One's finances and taxes, he said in the same statement, "are a personal matter, and I should not have made my opinions on them public."

California's highest tax rate until recently was 10.3 percent, second only to Hawaii's 11 percent. But in November, voters approved a measure (Proposition 30), urged on by Gov. Jerry Brown, that increased California's rate to 13.3 percent on persons earning $1 million or more.

That would include Mickelson.

Last year Forbes magazine ranked Mickelson the 7th highest-paid athlete in the world, earning $47.8 million. He has 40 PGA Tour victories to his credit and last year was inducted into the World Golf Hall of Fame.

His Sunday gripes were made in La Quinta, Calif., after he had finished mid-pack in the Humana Challenge. Politics, he told interviewers, were causing him to re-evaluate his future. "I'm not going to jump the gun and do it right away," the New York Times quoted him as having said. "But there are going to have to be some drastic changes for me because I happen to be in that zone that has been targeted both federally and by the state. And, you know, it doesn't work for me right now. So I'm going to have to make some changes. If you add up all the federal [taxes] and you look at the disability and the unemployment and the Social Security and state, my tax rate is 62, 63 percent. So, I've got to make some decisions on what to do."

Tiger Woods, commenting on Mickelson's complaints, was quoted by Bloomberg News saying, "I moved out of here [California] in '96 for that same reason. I understand what he was, I think, trying to say."

Many professional golfers, Woods included, live in Florida, which has no state income tax. Others live in Texas for the same reason. USA Today quotes Texas Gov. Rick Perry as having tweeted Mickelson, "Hey, Phil…we would love to have you."

Professor Len Burman of Syracuse University, a tax expert and Forbes contributor, questions whether Mickelson could really be paying 63 percent.

"My first reaction is that Phil should talk to his accountant," wrote Burman yesterday on Forbes' website. Mickelson's tax rate, argues Burman, has to be lower than 60 percent. Allowing for the phase-out of itemized deductions, and including a new 0.9 percent surtax enacted to help finance Obama Care, Burman figures a gross rate for Mickelson of 57.9 percent. After, however, allowing for other deductions, including 1.45 percent of payroll taxes, Burman says the golfer's net tax bite should be about 52 percent of marginal earnings, state and federal tax combined.

In his apology, Mickelson says he loves what he does; that he appreciates the game of golf; and that he remains motivated to compete and win championships. But, he says, like many another American, he is struggling to understand "the new tax laws."

He is receiving advice, he says, from people trying to help him make intelligent and informed decisions. "I certainly don't have a definitive plan at this time, but like everyone else I want to make decisions that are best for my future and my family."

Join the Discussion
You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus
 
You Might Also Like...