Phil Mickelson Exploring 'Drastic Changes' Due to Tax Hikes

Michael FitzpatrickFeatured ColumnistJanuary 21, 2013

SINGAPORE - NOVEMBER 08: Phil Mickelson of USA watches his tee shot on the 3rd hole during the first round of the Barclays Singapore Open at  the Sentosa Golf Club on November 8, 2012 in Singapore. (Photo by Stanley Chou/Getty Images)
Stanley Chou/Getty Images

While most of the golf world was watching Scott Stallings kick away his five-stroke lead on Sunday afternoon, Phil Mickelson was speaking to a small contingent of media members after his round at PGA West (Palmer Course) about how he is planning “drastic changes” due to the recent increase in federal and particularly California’s state income taxes.

“I'm not sure what exactly, you know, I'm going to do yet,” Mickelson said via ASAP Sports.

“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,” Mickelson continued.

California’s state income taxes for people earning more than $1 million per year recently rose from 10.3 percent to 13.3 percent. Mickelson’s federal income tax would have risen from 35 percent to 39.6 percent through Congress’ so called “fiscal cliff” agreement.

Social security, also known as the payroll tax, rose by two percent for all working Americans as part of the fiscal cliff agreement. 

In total, Michelson’s taxes would have increased by nine percent in just the past few weeks. However, only three percent of that increase would have come from the state of California. Mickelson could be living in any of the other 49 states in the America and still would have seen at least a six percent increase in his tax rate.

Mickelson’s “drastic change” is most likely going to simply involve a move to another state.

Retiring from the game of golf due to a tax rate increase of nine percent is highly unlikely and illogical at best because, if its money that he’s truly interested in, by retiring from the game of golf he’d be earning far less than the $47.8 million he earned last year as reported by Forbes Magazine.

Moving to another country is also highly unlikely because, well, it’s simply doubtful that a man earning $47.8 million per year would uproot his entire family for the sake of a nine percent tax increase, not to mention that he’d have an incredibly difficult time finding another somewhat similar English-speaking country on the face of the planet that would offer his income bracket a tax rate lower than what he currently pays in America.

Nope, Mickelson’s “drastic change” will more than likely be an announcement that he is moving to a state like Florida, Nevada or Texas, which are amongst the seven states in America that have no state income taxes.

Mickelson of course would not be the first golfer to make such a “drastic” decision, as most professional golfers already live in places like Florida, Texas or Nevada due to not only the ideal weather conditions but also the non-existent state income taxes.

So, Mickelson’s “drastic change” will wind up saving him a whopping total of between three and 10 percent in taxes; yet, all of the attention he has brought to this issue may wind up costing him fans which could in turn cost him tens of millions in endorsement dollars.

Mickelson’s most marketable quality is this image of the “everyday man.” He comes across as just a normal family man out there trying to win golf tournaments; the type of guy that you’d pass by at your local bank or local supermarket without giving a second glance.

Mickelson has even been compared to a modern-day Arnold Palmer.

Palmer was of course considered one of golf’s first blue-collar superstars, as his “army” consisted mostly of factory workers, coal miners, cops and firemen rather than country club types.

Of course, no one ever wants to see their own personal tax rates increase, but what Mickelson will likely find is that his fanbase, which consists mostly of “everyday men” might have a difficult time relating to a guy complaining about bringing home only $18.64 million after taxes as opposed to the $22.46 million he was bringing home prior to the tax increases.

The everyday man will have little sympathy for a guy who implies that his life and his family’s life is being so drastically affected by the loss of less than $4 million out of $47.8 million in income.  

Now, many people may agree that Mickelson’s new tax rate of almost 62 percent on income of $47.8 million is astronomically high. But, everyone has to pay taxes and virtually every working American is likely paying a rate higher than what they would like.

For example, the payroll tax rates for every single working American went up by two percent at the start of the January.

Of course, no one wants to see two percent more coming out of their paycheck, but they also have a difficult time relating to someone earning $47.8 million publicly complaining about virtually the same tax increase, as if this tax increase would “drastically” affect his lifestyle.

Mickelson may not be happy about his new tax rates, and he may very well wind up moving to a state like Florida or Texas. But, in the process he may single-handedly shatter the “everyday man” image he has worked more than 20 years to create; which, in the end, could wind up resulting in far less cash in his pocket than if he would have just kept his feelings to himself and paid his nine percent tax-rate increase.

On Sunday afternoon, Mickelson may have essentially bitten the hand that feeds him, which in this case was his very own hand.


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