Mickelson Making Drastic Changes

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TXgolfer

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LA QUINTA, Calif. -- Phil Mickelson said he will make "drastic changes" because of federal and California state tax increases.

"It's been an interesting offseason," Mickelson said Sunday after the final round of the Humana Challenge. "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."

“
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.
”
-- Phil Mickelson
The 42-year-old golfer said he would talk in more detail about his plans -- possibly moving away from California or even retiring from golf -- before his hometown Farmers Insurance Open, the San Diego-area event that starts Thursday at Torrey Pines.

"I'm not sure what exactly, you know, I'm going to do yet," Mickelson said. "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."

In November, California voters approved Proposition 30, the first statewide tax increase since 2004. It boosted the state tax rate on incomes of more than $1 million from 10.3 percent to 13.3 percent.

The federal taxes for Mickelson's tax bracket will also increase in 2013. According to the Wall Street Journal, rates on single incomes of more than $400,000 will go from 35 percent to 39.6 percent, while the Social Security tax will be raised from 4.2 percent to 6.2 percent.

"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," said Mickelson, who lives in Rancho Santa Fe. "So I've got to make some decisions on what I'm going to do."

Last year, Mickelson flirted with becoming a part-owner of the San Diego Padres franchise, which sold for $800 million in August. He was asked Sunday whether there was a correlation between the tax increases and what happened to the Padres' deal.

"Absolutely," Mickelson said.

He later explained why he was waiting to provide more details.

"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," Mickelson said. "And it just seems like a better fit than right here off of 18 on Palm Springs."

Mickelson closed with a 66 on Sunday to tie for 37th at 17 under in his season debut.

"I was rusty starting the year," Mickelson said. "I had a great four days here where I can work on my game with perfect weather and wonderful golf courses, where I could build some momentum. Heading into San Diego, I feel a lot more confident."
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Phil Mickelson hints at big off-the-course changes - ESPN

I think many will follow.
 
PGA golfers are like shark teeth; when one leaves, another grows in place. Sounds line whining to me. Why doesn't he move to Europe? He could still compete in Ryder Cup.
 
Update, from The truth behind the taxes of Phil Mickelson - Jan. 23, 2013

NEW YORK (CNNMoney)

There's no doubt that Phil Mickelson pays a lot in income taxes as a California resident, but it's not as much as he thinks.

The champion golfer said this week he might have to move out of the Golden State because of recent hikes in federal and state taxes on the wealthy.

"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," he was quoted as saying in Yahoo Sports. "So I've got to make some decisions on what I'm going to do."
California recently became the state with the highest top marginal tax rate thanks to voters passing in November a temporary tax hike on wealthy residents.
"California is beautiful, but we do have high taxes," said Gregg Wind, a partner at Wind & Stern, an accounting firm in Los Angeles. "That is a consideration for some folks."
Mickelson's tax rate, however, is closer to 51%, according to the Tax Foundation and California tax experts. His winnings and endorsements, which Sports Illustrated pegged at nearly $61 million in its most recent annual estimate, subject him to the highest marginal rates for married couples. Here's what they consist of:
-- A 39.6% top federal tax rate, up from 35%, on income above $450,000, thanks to the fiscal cliff deal passed by Congress on New Year's Day.
-- A 12.3% top state tax rate, up from 9.3%, on income above $1 million.
-- A 1% state mental health surcharge levied on incomes above $1 million.
-- A 3.8% Medicare tax rate, which includes a new 0.9% Medicare surcharge on earnings above $250,000.
But you have to consider that his state taxes are deductible from his federal taxes, which would leave him with a top rate of roughly 51%.
So where did he get the higher figure? It may be that he's adding in Social Security, disability and unemployment taxes. But those are levied only on a relatively tiny portion of his income and don't factor into his marginal tax rate.
Mickelson would have to fork over 15.3% in payroll taxes on the first $113,700.
And if he's self-incorporated, he may pay an additional:
--1% of the first $100,800 in state disability insurance taxes.
-- Up to 6.2% of the first $7,000 for state unemployment taxes.
-- 1.2% in federal unemployment taxes.
-- 0.1% in state employment training taxes.
Regardless of Mickelson's top rates, his actual tax bill isn't anywhere near one-half of his income. While it's hard to tell what the golfer really pays without seeing his tax returns, millionaires pay roughly 26% of their income in federal taxes, on average, according to William McBride, chief economist at the Tax Foundation.
First Published: January 23, 2013: 5:44 PM ET
 
saywhatkid said:
PGA golfers are like shark teeth; when one leaves, another grows in place. Sounds line whining to me. Why doesn't he move to Europe? He could still compete in Ryder Cup.
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I didn't hear any "whining" Phil merely stated he was making changes. That is being financially responsible.
 
TXgolfer said:
I didn't hear any "whining" Phil merely stated he was making changes. That is being financially responsible.
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Right. I would call it "fabricating." Perhaps he should ask someone for financial assistance. You know, one of those super-wealthy folks that barely pay taxes. There are lots of them around, but it is unclear how many remain US citizens.
 
Hey Mister SWK. I like your new your new avatar. Makes you look like a bad-ass. :D

Ok. Fawning over. Back to the thread.
 
saywhatkid said:
Right. I would call it "fabricating." Perhaps he should ask someone for financial assistance. You know, one of those super-wealthy folks that barely pay taxes. There are lots of them around, but it is unclear how many remain US citizens.
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:dunno: If you want to make assumptions you are free to do so. As for me I have no idea what taxes he is including in his statement. Cabo is a place currently recruiting people like Phil. I wouldn't blame him at all for moving there. Arizona (where attended college) would save quite a bit too.
 
TXgolfer said:
I think many will follow.
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I read that Tiger Woods may be next. He said that he understood where Phil was coming from and might join him in leaving California behind. Really can't blame them. That state is so screwed up.....

Laura
 
Lau2046 said:
I read that Tiger Woods may be next. He said that he understood where Phil was coming from and might join him in leaving California behind. Really can't blame them. That state is so screwed up.....

Laura
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I wouldn't be surprised to see Tiger move to Dubai. They treat him like a King there and golf is booming there as well. He actually has moved much of his life to Florida now and I believe he calls Florida his residence to avoid state income tax. That is why so many pro golfers live in Texas too.
 
TXgolfer said:
I wouldn't be surprised to see Tiger move to Dubai. They treat him like a King there and golf is booming there as well. He actually has moved much of his life to Florida now and I believe he calls Florida his residence to avoid state income tax. That is why so many pro golfers live in Texas too.
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He'd never move out of the country. His children are in Florida which his ex agreed to so that he could be involved in their lives. I do think Florida offers more tax incentives for him and he's already spoken in the papers how much he enjoys the state. I think it's just a matter of time....others may follow, who knows?
 
So, if they get thrown into Mexican prison for whatever reason, (think blackmail, extortion) after they move there to save tax money, I would plead with my Congressional people to let them stay in those jails. Not one cent of my tax dollars for tax dodgers. You wanna save money, don't come crawling back when things get dicey. They could have a fund raiser on Golf Channel.
 
saywhatkid said:
So, if they get thrown into Mexican prison for whatever reason, (think blackmail, extortion) after they move there to save tax money, I would plead with my Congressional people to let them stay in those jails. Not one cent of my tax dollars for tax dodgers. You wanna save money, don't come crawling back when things get dicey. They could have a fund raiser on Golf Channel.
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:cool2:
 
And here I thought "drastic changes" meant Mickelson was gonna start keeping his drives in the fairway. My mistake.
 
Journey said:
Phil Mickelson says publicizing tax views 'big mistake' - ESPN

I'm glad to see he admitted that it was not the time or place to discuss his taxes. Complaining about high taxes on a 40+ million annual income while on the course was not a bright move.
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I didn't hear him complain. He discussed his plans. He apologized because he made the comments during a conference call for a PGA event and later at a presser for a PGA event.

Otherwise, mitigating your tax burden is a financially responsible thing to do.
 
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