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neophytea

Phil Mickelson paying 62% in taxes??? Mickelson expects to make 'drastic' changes

288 posts in this topic

What is this all about?  Is this true?  Why does the government make more that phil does?

Phil Mickelson talks taxes, 'drastic changes'

Quote:

Phil Mickelson tied for 37th in the Humana Challenge, his 2013 season debut.

LA QUINTA, Calf. — Phil Mickelson started his 2013 PGA Tour season at the Humana Challenge in partnership with the Clinton Foundation with a tie for 37th place. But after a final-round 66, Mickelson did more than hint that the 2014 season may see some big changes for the World Golf Hall of Famer.

"Well, it's been an interesting offseason. And I'm going to have to make some drastic changes," Mickelson said at the Palmer Course at PGA West in La Quinta. "I'm not going to jump the gun and do it right away, but I will be making some drastic changes."

Pressed for details, Mickelson said he couldn't say if the changes will include moving from San Diego.

"I'm not sure what exactly I'm going to do yet. I'll probably talk about it more in-depth later this week (The Farmers Insurance Open in San Diego)," he said.

It became clear that part of what Mickelson is concerned about is the tax structure in the state and in the country.

"There are going 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 it doesn't work for me right now," Mickelson said.

While Mickelson didn't state specifics, increases in federal taxes under the deal to avoid the fiscal cliff in Washington D.C. and the passage of Prop. 30 in California in November to raise money for school funding have all increased taxes on the wealthy class.

"If you add up all the federal and you look at the disability and the unemployment and the Social Security and the state, my tax rate's 62, 63 percent. So I've got to make some decisions on what I'm going to do."

Mickelson said the changes he is thinking about caused him to withdraw from potential minority ownership of the San Diego Padres. And he said he will be more open to questions about his future and cutting back on his schedule this week.

"San Diego is where a lot more things, it's where I live, it's where the Padres thing was a possibility, and it's where my family is," Mickelson said. "And it just seems like a better fit than right here off of 18 on Palm Springs."

Mickelson's quotes from the press conference:

Q. When you're asked about Stricker's semi retirement, with the political situation the last couple months, blah, blah, blah, what did you mean by that? Do you find it an unsettling time in a way?

PHIL MICKELSON : Well, it's been an interesting offseason. And I'm going to have to make some drastic changes. I'm not going to jump the gun and do it right away, but I will be making some drastic changes.

Q. Meaning leaving from California?

PHIL MICKELSON : I'm not sure.

Q. Moving to Canada?

PHIL MICKELSON : I'm not sure what exactly, you know, I'm going to do yet. I'll probably talk about it more in depth next week. I'm not going to jump the gun, but there are going to be some. There are going 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.

Q. Is that a correlation between that and what happened to the Padres?

PHIL MICKELSON : Yeah.

Q. With you?

PHIL MICKELSON : Absolutely.

Q. So why do you say next week? What is going to happen so drastic next week?

PHIL MICKELSON : No, but I'll probably be in the media center and I'll probably be a little more open to it because San Diego is where a lot more things, it's where I live, it's where the Padre thing was a possibility, and it's where my family is. And it just seems like a better fit than right here off of 18 on Palm Springs.

Q. Is it a stance that you are taking because on the one hand, you've made a lot of money, and no matter how much they take out, you are left with a lot of money?

PHIL MICKELSON : Yeah. I'll probably go into it more next year or next week. But if you add up, if you add up all the federal and you look at the disability and the unemployment and the Social Security and the state, my tax rate's 62, 63 percent. So I've got to make some decisions on what I'm going to do.

Q. How do you balance that against the TOUR's retirement plan which by all standards is the best retirement plan in sports?

PHIL MICKELSON : I don't understand. What do you mean?

Q. Well, I mean I understand the 60 percent part of the equation, but in the TOUR's plan, you guys put about as much money aside as you want. It's treated differently under tax laws than most anybody else's tax plans. Where most people can only put away $45,000 or $50,000, you guys can put as much away as you want. And so at the end you guys end up with a much larger pot of gold than most people can.

PHIL MICKELSON : But when it comes out, it's still taxed at the same 62 percent rate.

Q. Well, you're still making that kind of money. That's if you're still in that bracket .

PHIL MICKELSON : (No response.)

Bohannan writes for The Desert Sun in Palm Springs, Calif.

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Originally Posted by neophytea

What is this all about?  Is this true?  Why does the government make more that phil does?

Because they can. Which is why you might see Mikelson (and other high-income folks) moving his permanent residence to a non-income tax state like Nevada or Florida.  Same as many Europeans sports stars have their official residence in Monaco.

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Uhhh... call me cynical. Phil's made some dunderheaded statements about politics in the past. I think he said something about how some bizarre percentage of Americans work for the government when he was on the air with the Deutsche Bank guy once, or something.

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Moving to Canada would not be advisable if he is looking for lower taxes.

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Phil should move to Florida or Texas, anyone making as much as Phil while living in NY or CA is getting killed in taxes and it will only get worse.  The question is why Phil feels the need to discuss this in an interview.  It's a personal issue that can be dealt with after he relocates.

California isn't going to change the tax laws because he's unhappy, and Obama couldn't care less about Phil's tax issues.

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The tax rate in CA in the past was 10% and he didn't move. Is moving to 13% really the breaking point? He was willing to lose 100k/million but not 130k/million? If it mattered to him, he should have moved years ago. I know that was #1 reason I left. When I retired and not making as much (i.e. living off principal) I am looking forward to going back. Year round golf in great weather is awesome. You also have to remember that prize winnings are taxable in the state they are won. Winning pebble beach causes you to pay CA no matter where you live. Most endorsements go to state of residence. And yes the tax code is drastically unfair in that a guy like Mitt can pay 13% while a hard working golfer pays more like 52%(they number that other people have come up  for guys making the max rates in CA. I think Phil just added up all the percentages).   The top .01% like it that way though.

As far as it not working for him, he can stop any time he wants.  However it should be pointed out that 38% (use his number) of 60 million is a lot more than 100% of 0. I am not sure about european tax laws but moving to a Tax haven only works for US citizens if you want to renounce citizenship which can get pretty messy.

Originally Posted by Harmonious

Because they can. Which is why you might see Mikelson (and other high-income folks) moving his permanent residence to a non-income tax state like Nevada or Florida.  Same as many Europeans sports stars have their official residence in Monaco.

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Originally Posted by iacas

Uhhh... call me cynical. Phil's made some dunderheaded statements about politics in the past. I think he said something about how some bizarre percentage of Americans work for the government when he was on the air with the Deutsche Bank guy once, or something.

I remember that interview and he was rather off the wall with his comments but I think he was getting at job growth not actual employment. I hope he was trying to say that 47% of job growth was created by government jobs because if not he might be losing it.

Originally Posted by x129

The tax rate in CA in the past was 10% and he didn't move. Is moving to 13% really the breaking point? He was willing to lose 100k/million but not 130k/million? If it mattered to him, he should have moved years ago. I know that was #1 reason I left. When I retired and not making as much (i.e. living off principal) I am looking forward to going back. Year round golf in great weather is awesome. You also have to remember that prize winnings are taxable in the state they are won. Winning pebble beach causes you to pay CA no matter where you live. Most endorsements go to state of residence. And yes the tax code is drastically unfair in that a guy like Mitt can pay 13% while a hard working golfer pays more like 52%(they number that other people have come up  for guys making the max rates in CA. I think Phil just added up all the percentages).   The top .01% like it that way though.

As far as it not working for him, he can stop any time he wants.  However it should be pointed out that 38% (use his number) of 60 million is a lot more than 100% of 0. I am not sure about european tax laws but moving to a Tax haven only works for US citizens if you want to renounce citizenship which can get pretty messy.

I agree and if it is that big of a deal in terms of what he pays in total taxes he could easily save money by moving to Florida. A lot of pro golfers live in florida and Tiger isn't living there because of the great golf.

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It's also possible Phil lost some money in a business investment sometime along the line and is hurting more than just with taxes.
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Originally Posted by jamo

It's also possible Phil lost some money in a business investment sometime along the line and is hurting more than just with taxes.

Well, T-bone steak prices did become so expensive that Waffle House had to stop serving them.

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Mikelson's Wednesday press conference in San Diego should answer the speculation.

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Sometimes Lefty needs to keep his mouth shut. Yes, he's paying about 7% more in taxes this year but it's going to be hard for the average American to sympathize with someone who made about $45 million last year. If he duplicates this in 2013, at a 63% rate he'll take home over $16 million dollars. He has the right to maximize his take home but is it worth it for him to uproot his family and possibly change his golf plans for 7% of that kind of income?

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Originally Posted by iacas

Uhhh... call me cynical. Phil's made some dunderheaded statements about politics in the past. I think he said something about how some bizarre percentage of Americans work for the government when he was on the air with the Deutsche Bank guy once, or something.

Golfers and politics - like most celebrities, they ought to clear what they're going to say with their agent.

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Originally Posted by MSchott

Sometimes Lefty needs to keep his mouth shut. Yes, he's paying about 7% more in taxes this year but it's going to be hard for the average American to sympathize with someone who made about $45 million last year. If he duplicates this in 2013, at a 63% rate he'll take home over $16 million dollars. He has the right to maximize his take home but is it worth it for him to uproot his family and possibly change his golf plans for 7% of that kind of income?

Where would you draw the line at what amount would be acceptable to make plan changes to maximize income?

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Chances are that he will just move his primary residence to a no state income tax state, which saves him quite a bit.  He can then continue to use his current residence as a secondary home if he so chooses.

I think he's actually making decisions just like a lot of other people are that are feeling burdened by their overall tax rate.

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I don't feel sorry for Lefty whatsoever. His accountant probably told him years ago about the tax situation.

So what, he can't upgrade his Cessna this year? I feel very sorry for him.

Besides, the San Diego Padres chronically lose money, so there's a tax write-off for Lefty right there.

Cry me a river.

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If maximizing his income improves his quality of life he should do  it. If it doesn't he shouldn't. If having 20 million versus 16 makes his life better in income in 2013, go for it. I think Phils income was actually higher (the article says KPMG alone paid him 44 million. I have seen stats pushing Phil over 60 million) but who knows where the money has gone. He could either have a couple hundred million in the bank or he could be living year to year because of insane spending. Who knows.

Originally Posted by 14ledo81

Where would you draw the line at what amount would be acceptable to make plan changes to maximize income?

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I understand that Phil makes more money than almost all of us put together on this forum but. I run a small family practice in a small town and I employ 7 people  .  I do not make a half a percent of what Phils makes. so I would imagine that he has at least 10 - 15 full time people working for him , if not more..  He is a business. On top of the 39.6% federal taxes and the over 13% state income tax he does have to pay workers comp insurance premiums, FICA for his employes, retirement and now has to pay additional taxes for Obamacare. I do believe that he pays close to 63% of his income in taxes. The only thing he can control is the amount of state taxes he pays by moving to a low tax state . Also he might reduce his workier comp insurance depending on the state he moved to. So I do not blame him for trying to do something about it. Be realistic, if we were in his shoes wouldn't we do the same. I know this is not the forum for it but why do we punish success in this country?

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Originally Posted by setexmd

I understand that Phil makes more money than almost all of us put together on this forum but. I run a small family practice in a small town and I employ 7 people  .  I do not make a half a percent of what Phils makes. so I would imagine that he has at least 10 - 15 full time people working for him , if not more..  He is a business. On top of the 39.6% federal taxes and the over 13% state income tax he does have to pay workers comp insurance premiums, FICA for his employes, retirement and now has to pay additional taxes for Obamacare. I do believe that he pays close to 63% of his income in taxes. The only thing he can control is the amount of state taxes he pays by moving to a low tax state . Also he might reduce his workier comp insurance depending on the state he moved to. So I do not blame him for trying to do something about it. Be realistic, if we were in his shoes wouldn't we do the same. I know this is not the forum for it but why do we punish success in this country?

I think it was the way he said it that upset people. Given the current economic climate, when many people have a hard time providing for their families or even justifying the price of a ticket to a golf tournament (or other sporting event) the last thing they want to hear is Phil complaining about having to live off 15 million a year instead of 20-30 million.

Phil's success has benefited him for years and I think the fact that he gets to play golf all over the world for millions of dollars is evident that he is not punished for being successful.

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