The Phil Mickelson Effect and California: Taxed to the MAX!!!

[paramount]

http://www.csmonitor.com/USA/Politics/2013/0124/The-Phil-Mickelson-effect-Do-millionaires-flee-states-with-high-taxes-video

[CA renter]

Totally lame. California’s taxes aren’t what’s making his tax burden onerous; it’s the federal taxes that make up the bulk of his taxes.

He DOES have a legitimate gripe, though when hedge fund managers and others who don’t work for their money (like Mitt Romney) are paying 15-20% max while he and others who **work for a living** are paying ~35% (and going higher). There is absolutely no reason to have different (and LOWER!!!) tax rates for the wealthy parasites who don’t even work for their money.

The fairest tax of all is one where all types of income are taxed at the same progressive rates.

[SK in CV]

He’s overstated his tax rate by at least 10%. He doesn’t pay anywhere near 62 or 63% as he claimed. It can’t be anymore than 52%.

[spdrun]

The fairest thing would be for CA to SECEDE from the US. The parasite-pigs in DC take much more money from its citizens than they give back, per capita. It goes to support pestholes like Mississippi and Oklahoma that should have been kicked out in 1861.

[Hobie]

Do these golfers/football/baseball players have to obtain a city of San Diego business license and pay associated fees?

Same goes for winnings in other states. Are they subject to that state income tax plus their home state income tax?

[SK in CV]

[quote=Hobie]Do these golfers/football/baseball players have to obtain a city of San Diego business license and pay associated fees?

Same goes for winnings in other states. Are they subject to that state income tax plus their home state income tax?[/quote]

No license required. They do have to pay taxes to the various states in which they have earnings. But they don’t pay double state taxes. If their home state has income taxes, they get credit for taxes paid to other states. Though the various state laws didn’t change, states started enforcing their existing laws and collecting taxes from professional athletes that had earnings in their states in the early 80’s, based on (for instance) the number of games their teams played in their states.

[meadandale]

[quote=SK in CV]He’s overstated his tax rate by at least 10%. He doesn’t pay anywhere near 62 or 63% as he claimed. It can’t be anymore than 52%.[/quote]

Top Fed Rate (39.6) + Top CA Rate (12.3) + Full Fica + New surcharge (15.3 + 0.9) = 68.1%

Since he makes most of his money above the margin where these rates kick in most of his money is taxed at the full rates.

[SK in CV]

[quote=meadandale][quote=SK in CV]He’s overstated his tax rate by at least 10%. He doesn’t pay anywhere near 62 or 63% as he claimed. It can’t be anymore than 52%.[/quote]

Top Fed Rate (39.6) + Top CA Rate (12.3) + Full Fica + New surcharge (15.3 + 0.9) = 68.1%

Since he makes most of his money above the margin where these rates kick in most of his money is taxed at the full rates.[/quote]

No. I was wrong on the 52%, it’s closer to 55%.

FICA for 2012 was 4.2%. It’s 10.4% if he’s self employed. But only on the first $110K. For 2013 it’s 6.2 and 12.4 respectively on the first $113,700. Mickelson is reported to have earned $48 million. So the most he could have paid in 2012 was around $11,500. In 2013 it will be about $14K. Which is less than .03% of his income.

He’ll also be able to deduct 20% of CA tax, bringing his net tax down by 1%.

39.6 + 3.8% surcharge + CA tax 13.3%, FICA .03%, less value of state tax deduction of 1% = 56%. But he still gets the benefits of the lower rates on taxable income under $450K federal and $1M for CA, which would bring his net rate below 55%.

[earlyretirement]

[quote=SK in CV][quote=meadandale][quote=SK in CV]He’s overstated his tax rate by at least 10%. He doesn’t pay anywhere near 62 or 63% as he claimed. It can’t be anymore than 52%.[/quote]

Top Fed Rate (39.6) + Top CA Rate (12.3) + Full Fica + New surcharge (15.3 + 0.9) = 68.1%

Since he makes most of his money above the margin where these rates kick in most of his money is taxed at the full rates.[/quote]

No. I was wrong on the 52%, it’s closer to 55%.

FICA for 2012 was 4.2%. It’s 10.4% if he’s self employed. But only on the first $110K. For 2013 it’s 6.2 and 12.4 respectively on the first $113,700. Mickelson is reported to have earned $48 million. So the most he could have paid in 2012 was around $11,500. In 2013 it will be about $14K. Which is less than .03% of his income.

He’ll also be able to deduct 20% of CA tax, bringing his net tax down by 1%.

39.6 + 3.8% surcharge + CA tax 13.3%, FICA .03%, less value of state tax deduction of 1% = 56%. But he still gets the benefits of the lower rates on taxable income under $450K federal and $1M for CA, which would bring his net rate below 55%.[/quote]

Yeah, I posted this on another forum.

http://money.cnn.com/2013/01/23/news/economy/mickelson-taxes/index.html?iid=SF_PF_Lead

I’d like to see how he came up with the 63%. Me thinks Phil needs to find a new accounting firm if he really is paying 63%. Also, it’s totally ironic and a bit funny that he has KPMG on his hat and sponsor.

I’m NOT saying that he doesn’t pay a lot of taxes and I think it should be less but definitely I think he didn’t give a realistic number which makes him look even sillier complaining about all the taxes he pays.

[Hobie]

Thx Sk. I find it interesting that some cities ( San Marino) go after service trades like landscapers,or anyone with a name on a work truck for business license fee but let the big $ get a pass.

Maybe when Mickelson say 63% taxes he is lumping in other ‘fees’ as well.

I do this with fees, permits, tax. Gives me a better estimate of the true cost of business. You know, ‘for the privilege of doing business ..’

End snark as I’m writing out tax checks now and not happy.

[SK in CV]

[quote=Hobie]Thx Sk. I find it interesting that some cities ( San Marino) go after service trades like landscapers,or anyone with a name on a work truck for business license fee but let the big $ get a pass.

Maybe when Mickelson say 63% taxes he is lumping in other ‘fees’ as well.

I do this with fees, permits, tax. Gives me a better estimate of the true cost of business. You know, ‘for the privilege of doing business ..’

End snark as I’m writing out tax checks now and not happy.[/quote]

The thing is with those fees and permits, they’re meaningful for some small businesses. $100 here, $150 there. In his original whine, Phil also included disability and unemployment. Almost every employee in CA pays SDI, it had a cap last year of $956. Employees and the self-employed don’t pay unemployment insurance, employers do. but even if he’s counting himself as his own employer because he’s incorporated some part of his business, the most he might pay is probably $500 a year. Those little costs are annoying, and even meaningful for a small business making $50K a year, but they’re not enough to make anyone leave the state.

But for Phil? If he pays them, they amount to less than .01% of his income. Not 1%. One one-hudredth of one percent. About a dollar out of every $30,000 he earns. He looks foolish even mentioning them.

[earlyretirement]

I’m NOT a fan of taxes and I agree California has way too many taxes. But this isn’t the environment/climate/economy for people making $50+ million a year to complain about high taxes.

It’s clear his PR team (and probably sponsors) had no clue he was going to do this and they would have NOT approved. Hence the public apology.

I don’t feel sorry for the taxes Phil pays just like I don’t feel sorry for all the taxes the CEO of Goldman Sachs pays each year.

Phil doesn’t seem like the type that could stay over in Singapore and raise his family. Will he end up in Florida or Texas and establishing residency there? Probably. Phil is free to complain about taxes but he has to accept the flack he will take from the public.

In today’s environment where there is such a sense of entitlement from people that want wealthy to support them, it’s probably better to lay low and not let people know you make $50 million a year. Most people probably never imagined that Phil made this kind of money each year. And many of them have an image of him now as a spoiled wealthy guy making tens of millions a year complaining about taxes.

Again, I’m not saying he isn’t right the taxes are too high in California, but he will get VERY few that feel sorry for him making the kind of money he does. Especially for being in a sport which he loves.

[sdduuuude]

[quote=earlyretirement]
…

But this isn’t the environment/climate/economy for people making $50+ million a year to complain about high taxes.

…

I don’t feel sorry for the taxes Phil pays just like I don’t feel sorry for all the taxes the CEO of Goldman Sachs pays each year.

…

In today’s environment where there is such a sense of entitlement from people that want wealthy to support them, it’s probably better to lay low and not let people know you make $50 million a year.

…

but he will get VERY few that feel sorry for him making the kind of money he does. Especially for being in a sport which he loves.[/quote]

I don’t disagree with you on these points, but the issue is not whether we sorry for a wealthy pro golfer.

The thing to ponder is that those who are on entitlement programs and want the wealthy to support them just lost a supporter.

So, either you feel sorry for him or you feel sorry for the gubmint and the gubmint cheeze recipients who stand to lose a fair bit of revenue.

And, what if more go ?
Will the poor folk be begging for them to come back?

[CA renter]

The poor folk are the ones paying for his incredibly high income.

Mind you, most entertainers don’t make their money from those who worship them and buy their tickets, etc. They make most of their money from endorsements and sponsorships, etc…and that money comes from people like myself, who couldn’t give a rat’s a$$ about these people, but who have to pay for them whenever we buy food, drinks, insurance, cars, laundry detergent, water, milk, bread, cereal, gum, etc., etc.

Isn’t this a form of “taxation” (for the benefit of the very wealthy) on those of us who have to buy these products?

[sdduuuude]

Please list 3 products you purchased from Phil’s sponsors this year.

[Author]

Posts