The government is taking a big bite out of his $180 million fortune
Golfer Phil Mickelson didn’t make much noise on the links at this weekend’s Humana Challenge tournament, finishing in a tie for 37th, but he tried to take a mulligan on his post game remarks. Mickelson, whose net worth is an estimated $180 million, said onerous taxes were really messing with his plans. In particular California’s top rates were forcing him to consider leaving the state and playing fewer tournaments. They also played a role in his decision not to invest in the San Diego Padres:
“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.
Mickelson’s airing of his grievances was sufficiently tacky that even Forbes.com, a publication with an attitude towards wealth that might be described as breathless, gushing, rapture, found the golfer’s plaint a bit, um, rich. (And Forbes once published a slide show on the world’s highest paid golfers. Mickelson is second):
For starters, courtesy of President Obama’s re-election and the subsequent fiscal cliff negotiations, Mickelson will experience an increase in his top tax rate on ordinary income from 35% to 39.6%, and an increase in his top rate on long-term capital gains and qualified dividends from 15% to 20%. Clearly, when faced with tax hikes of that magnitude, it stops making economic sense for Mickelson to continue to swing a metal stick up to 70 times a day in exchange for the $48 million he earns on an annual basis.
But it gets worse. Thanks to the expiration of the temporary 2% reduction in the payroll tax rate on the first $113,700 of self-employment income, Mickelson will have to fork over an extra $2,274 in tax during 2013, an additional burden that makes it hard to justify briskly walking as many as five miles per day, four days a week. In long pants, nonetheless.
Forbes notes that Mickelson could turn to his sponsor, accounting firm KPMG, to help him with his tax problems.
Following his outburst Mickelson had the presence of mind to realize that he should have kept his damn opinions to himself:
The four-time major champion didn’t back away from his outlook, only his decision to talk about it.
“Finances and taxes are a personal matter, and I should not have made my opinions on them public,” Mickelson said in a statement released late Monday night. “I apologize to those I have upset or insulted, and assure you I intend to not let it happen again.”
That’s to his credit. Sadly he lacked the self-awareness to ask himself if anyone would care if he disappeared from public life.
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