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Mickelson threatens to leave over taxes

Pro golfer weighing move from California, possible retirement

San Diego pro golfer Phil Mickelson stated in La Quinta over the weekend that there will be "drastic changes" in his life. He may reveal some of them at the Farmers Insurance Open that begins Thursday at Torrey Pines. His statement was reported by the Associated Press, ESPN.com, and other media. Mickelson said, "If you add up all the federal and you look at the disability and 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 am going to do." One thing his statement may do is encourage corporations and individuals to leave California. Already, San Diego's ResMed -- which gets a considerable amount of its revenue from government programs -- is considering departure because of high taxes and union influence. One thing Mickelson MUST do is explain how his tax rate can be 62% or 63%. Last year, Mickelson considered becoming a part owner of the Padres. Then he backed out. Yesterday he said that his decision to drop out "absolutely" had something to do with his alleged tax burden.

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San Diego pro golfer Phil Mickelson stated in La Quinta over the weekend that there will be "drastic changes" in his life. He may reveal some of them at the Farmers Insurance Open that begins Thursday at Torrey Pines. His statement was reported by the Associated Press, ESPN.com, and other media. Mickelson said, "If you add up all the federal and you look at the disability and 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 am going to do." One thing his statement may do is encourage corporations and individuals to leave California. Already, San Diego's ResMed -- which gets a considerable amount of its revenue from government programs -- is considering departure because of high taxes and union influence. One thing Mickelson MUST do is explain how his tax rate can be 62% or 63%. Last year, Mickelson considered becoming a part owner of the Padres. Then he backed out. Yesterday he said that his decision to drop out "absolutely" had something to do with his alleged tax burden.

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Comments
20

MICKELSON COOLS OFF. According to the Union-Tribune, golfer Mickelson has softened his remarks. Late Monday (Jan. 22), he released a statement stating, "Right now I'm like many Americans who are trying to understand the new tax laws...I certainly don't have a definitive plan at this time...Finances and taxes are a personal matter and I should not have made my opinions on them public. I apologize to those I have upset or insulted." He still loves golf. Best, Don Bauder

Jan. 22, 2013

So, could he claim a residence in a low tax state and still have the income he has now?

Jan. 22, 2013

Murphyjunk: He would have to move to that state, then could enjoy lower tax rates if that's all that interests him. Best, Don Bauder

Jan. 22, 2013

Personally, I would recommend Washington state over Nevada. Just as easy to establish residency, but a much nicer place to "live". But dealing with CA non resident tax forms is one big pain in the ass.

Jan. 22, 2013

tomjohnston: But what about the California lifestyle, especially for a golfer?

Jan. 22, 2013

Mickelson normally plays around 20-25 tournaments, including a handful of non PGA tournaments in Europe. There are 42 or 43 PGA tournaments this year with only 4 of those in Ca, one of which is at Torrey. With 20-25 tournaments and a myriad of sponsorship and endorsement appearances, he is easily on the road for half the year. That would make it easy for any golfer who wanted to maintain "residency" in another state while maintaining a residence in Ca. It’s just not that tough. Then they can live that "California lifestyle" that some people like so much. BTW a couple of years ago, I read that more pro golfers had residence in Florida than any other state.

Jan. 22, 2013

tomjohnston: Yes, I have also heard that a number of pro golfers make Florida their homes. As to whether Mickelson could keep his San Diego residence and claim to the IRS that he has residency in another state: that could be a convoluted maneuver. He will need a good lawyer for that one. He is supposedly worth north of $150 million. I have no sympathy for those with that kind of wealth whining about taxes. Best, Don Bauder

Jan. 22, 2013

Actually, I don’t believe there is a concern with the IRS. His federal taxes aren’t determined by which state he claims to be his official residence; they get their cut no matter which state he lives in so I would imagine they couldn’t care less. That said, I suppose he would have to be careful about claiming business expenses when traveling to Ca. But all he would have to do is talk to his good friend Mr. Woods about that. Tiger resides in Fl, but he still has at least 1 home in CA. It’s really the State of Ca that he would have to worry about. But his occupation gives him a built in advantage. The first 2 official PGA events are in Hawaii, but 4 of the next 5 are in Ca, and 3 of those are in So Cal. It’s a perfect opportunity to use a second, west coast home for business reason. From there it’s a match play in Tucson and then every US PGA event is east of the Rockies until August in Reno, which he rarely plays and then it’s back east for the rest of the season. He would only need to show residency in FL for 6 months and 1 day. The PGA season runs from early January until late September/early October plus there are several high purse overseas tournaments between the end of the PGA season and Christmas. With the amount of traveling required, most of it in the eastern US and overseas, it would be fairly easy to claim Florida as his home base, at least on paper, for residency purposes. Along those lines, he could easily justify keeping a second home in San Diego, as necessity for R&R during a long PGA season. Not to mention the fact that he still has familial and business ties to the area. Or "reside" in Reno or wherever. In fact, he would have to be pretty sloppy and stupid NOT to be able to get away with it. Last year, Mickelson made just over $48 million, with his golf winnings amounting to only a little over $4 million. Like you, I have absolutely NO sympathy for someone who has an after tax income of close to $30 million and is whining about his taxes being too high. And as one can see by the statement issued by Mickelson, even he realizes that he has managed to put his entire size 12 in his mouth.

Jan. 22, 2013

tomjohnston: Why don't you volunteer to become Mickelson's tax planner? He shouldn't have to pay 62% or 63%. He should only have to pay a little over 50%, I understand (but I haven't, and won't, put the pencil to it.) Obviously, Mickelson got negative reaction to his original statement. That's why he backed down -- slightly. A few boos from the gallery might put some sense into him. Grossing $48 million a year and whining about taxes? He has hurt himself with these insensitive remarks. Best, Don Bauder

Jan. 22, 2013

Can't stand Mickelson as a golfer.Don't know him personally, so I really don't care.

Jan. 22, 2013

tomjohnston: I have never met him either that I can recall. I do think he is a good golfer. Best, Don Bauder

Jan. 23, 2013

"He should only have to pay a little over 50%, I understand (but I haven't, and won't, put the pencil to it.)" That's been done for you (from LAT): The Congressional Budget Office calculated that after deductions, exemptions and other tax-minimization techniques, the typical member of the 1% paid 24.2% of his or her earnings in federal income taxes in 2000, the last year before the Bush-era tax cuts lowered the top marginal rate from 39.6% to 35%. Throw in all other federal levies, such as self-employment and excise taxes, and the total federal burden rose to 33%. Add in his Ca tax liabilities, and he is less than 50% probably closer to 46%. Just another whiny rich guy.

Jan. 23, 2013

tomjohnston: LA Times calculations sound reasonable. Best, Don Bauder

Jan. 23, 2013

Don Bauder you really need to start paying closer attention to what we post here. These are NOT LAT calculations. The calculations are clearly identified as coming from the CBO: "The Congressional Budget Office calculated". Perhaps an eye exam is needed?

Jan. 23, 2013

tomjohnston: Blame it on age. Best, Don Bauder

Jan. 23, 2013

California has a jock tax. No, the state doesn't tax a man based on the length of his pecker. At least not yet. But with Governor Brown facing a budget deficit of Rubirosa-like proportions, that may change. Filner has threatened to levy such a tax. However, California taxes athletes and performers on the income they earn in the state using a complicated formula. Even if Mick moves to Florida, he's still going to have to pay taxes on his California winnings.

https://www.ftb.ca.gov/individuals/wsc/sports.shtml

Jan. 22, 2013

Burwell: Hooray for California's jock tax. Now we need something like it to apply to hedge fund heads, private equity honchos, etc. Best, Don Bauder

Jan. 22, 2013

Perhaps you should read the book "How Money Walks".

Jan. 24, 2013

At the Federal level I think we have more of a revenue problem than a spending problem, although both must clearly be addressed.

Sorry, but I think at the state level we have more of a spending problem. It's hard for me to get upset at Michelson's comments when CA has a prison psychiatrist making over $800K/yr http://www.bloomberg.com/news/2012-12-11/-822-000-worker-shows-california-leads-u-s-pay-giveaway.html

Jan. 24, 2013

ImJustABill: Agreed: federal spending is pretty well under control, and the real problem is revenues. I think Jerry Brown is making headway in California. But you are right: the California prison union has too much power and is responsible for too many abuses. Best, Don Bauder

Jan. 24, 2013

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