"Phil Mickelson, stop whining and give thanks for your good fortune"

Syracuse professor Len Burman pens an item for Forbes.com and it doesn't get off to the best start with the professor citing Phil's comments in "Saturday's New York Times," a major problem since they were uttered on Sunday and he's trying to make a factual case.

That said, his main point is one that Mickelson sponsor KPMG probably won't appreciate: if Phil's paying what he says he's paying his accountants aren't doing their job.

My first reaction is that Phil should talk to his accountant because his effective tax rate is surely lower than 60 percent.  The fiscal cliff deal raised his marginal income tax rate to 39.6% (assuming he’s in the top bracket).  The phase-out of itemized deductions will add about 1.2% and he will also have to pay a combined Medicare tax rate of 3.8% (the regular 2.9% for self-employed people plus the new 0.9% surtax enacted to help finance the Affordable Care Act).  According to the New York Times article, Mickelson will also owe 13.3% in California state income taxes because he’s in the new millionaire bracket.  That adds up to 57.9%, but state income taxes and 1.45% of the payroll tax are deductible from federal income tax, so that reduces their net cost by 5.8% (39.6% of 14.75%).  In net, Mickelson will owe about 52% of his marginal earning in federal and state taxes.

In other news, an unbylined FoxNews.com story lumps Phil in with actor Gerard Depardieu. Let's hope Phil doesn't want to move to Russia.

Sam Weinman compiles some of Phil's previous bits of venting, some of which were successful in making his case.

Lorne Rubenstein points out that Mickelson's comments overshadowed the golf played last weekend.

This time, he got on a soapbox and said a mouthful. He’s wealthy and he’s entitled to move where he wants. But suddenly hardly anybody was talking about Brian Gay’s win in a playoff at the Humana. Nobody was talking about Jamie Donaldson beating Justin Rose at the Abu Dhabi HSBC Golf Championship. Did Tiger Woods and Rory McIlroy miss the cut at Abu Dhabi? Oh yes, they did. That seemed a long time ago.

Update on Tuesday, January 22, 2013 at 10:26 AM by Geoff

**Here's a different analysis from Ed Kilgore that again suggests the topic raised uncomfortable questions about the competance of Phil's accounts. Uncomfortable since KPMG, his sponsor, also presumably does some of his accounting work.

Aside from the rather important dual facts that (a) he seems to be conflating marginal and average taxes, likes so many people do, and (b) to pay anything like the rates he’s talking about he’d have to have the most incompetent financial advisers in the world; Mickelson does put a real question on the table. Should we worry that in a progressive tax system extraordinary people will no longer feel a continued financial incentive to do extraordinary things? And if there’s any risk of that, how do we discern the difference between sheer greed (and in the case of people who become insanely rich playing games, perhaps ingratitude) and some presumed rational breaking-point where toil and trouble are no longer worth the effort?

I guess the simple answer to that is: experience will tell.

Comments

[pat burke]

So let's say Phil's number is actually 50% in fed/state taxes.
add local, state and whatever taxes thrown at all of us in California.

The number in taxes is easily north of 50%.

What percentage of earnings, IS acceptable for the govt to take?

I personally believe it is absurd for anybody to work 1/2 the year for the govt.
I have been in the high tax brackets, and now lower.

And yes, at one time, I moved to Nevada. Better taxes, and more importantly, a better practice
situation at that time. My one year in Nevada, I saved enough in state income tax (versus CA)
equal to the down payment on my current home.

There isn't anything the California govt provides that is worth (among) the highest taxes in the nation

[david]

"Selling golf clubs "?? Does this Professor person think Phil is a club pro I wonder ? Why no reference to folding sweaters ?

[DTF]

When E.F. HUTTON talks, people listen!

Got your nomex handy P.B.?!?

[Desmond]

The taxes are absurd but if he is going to whine he needs to be giving accurate numbers

[Hawkeye]

I think Phil is a big-time whiner on this case, but someone needs to fill me in here - I thought your hospital bills were covered by insurance, and that your college tuition was paid out of your own pockets? Health care and university is for free in Sweden, so our high taxes feel legit. But what does your tax money go to?

[T. Holman]

It is truly a terrible tragedy that, someone who has been able to earn $100 million after whatever taxes by hitting a ball with a stick thinks there is something "wrong" with our society.

How did Palmer and Nicklaus make any money back in the days of 90 and 70% tax rates. My God how their lives have been impoverished and the two of them reduced to teaching lessons at the local muni to make ends meet.

This whole debate just highlights how far wingnut the baby boomers have gone in their constant quest of self satisfaction.

Memo to all of you under 50: from 1946 - 1982, the top marginal rate was between 90 - 51%, much higher than currently and those years were generally considered the Golden Age of America.

[johnnnycz]

Funny hearing about a millionaire complain about having to make "drastic changes". That's like having to opt for a round-shaped pool because the fancy bean shaped model was out of the budget...or is the Burberry school clothing going to have to last an extra year? LOL...cry me a river Phil.

Anyways...it's good to have the old FIGJAM back again...Phil lost that moniker awhile back... apparently not.

[Seve]

Phil is forgetting he wouldn't be the golfer he is today without the government of California. It makes me sick to see him attempt to avoid his responsibility to the state. Golfers should pay 95% in taxes, how can anyone justify making money from a game when it would be better spent on giving more welfare benefits to malnourished and under motivated.

[ghost Golfer]

Only Snake Pliskin can save us from this slippery slope of having others tell us whats best for the individual.

[Ace]

Memo to T.Holman,

If you are referring to Mickelson in paragraph three, he is a member of Generation X, not a Boomer.

Regarding tax rates, the "golden age" and your implicit argument, for over seventy years, tax revenue has remained remarkably consistent at approximately 18% of GDP irrespective of substantial fluctuations in rates.

Your mediocrity is inspiring, I'm sure, to the less gifted in our midst.

[No longer Used to be Former Stack & Tilt Convert]

As I said earlier, when your tax code is so murky that can be interpreted differently by everyone, there may be a politician involved in writing it. It is funny that the professor who's job is to be an expert on tax code has to use the word "about" before giving his number.

Let's assume the Syracuse tax professor is right, 52% for Phil, what would be his number in Florida? No way I try to do the math.

[3foot1]

Phil should try being a teacher for a few days. Or a few decades.

And we've got it better than nurses, cops, and quite a few others.

[D. maculata]

Some great stuff so far this morning, might even have a shot to eclipse yesterday's. And the comments on the Burman link were just as funny when you consider what comes out of that indoctrination tank of progressive thinking called Wesleyan.

You really need a change in attitude, Pat. To avoid a Nomex purchase as DTF suggested, get on the "You didn't build that!" wagon and you'll start to feel better about yourself.

[Farouck]

I'm very surprised that Phil is not setup as a corporation. With his various business's and different areas of income it seems odd that he does not "run" everything through a co. If he did then why would he not be incorporated in De. ( de has very favorable tax laws for co., most major co. such as Walt Disney are incorporated there even without any office presence...). That could very save him an additional 10% of his California tax.

I would agree as to what his accountants are doing. There are people who specialize in doing such things....hell why doesn't Phil call Mitt as he seemed to have it figured out.

[Ace]

Screw Nomex. Defilade and fire for effect.

[KS]

Perhaps he gets that 62% by including sales and real estate taxes?

[Ace]

Fox News and The Sporting News are both reporting that Mickelson has apologized for speaking publicly about taxes and his personal finances.

[KLG]

@Hawkeye:
http://en.wikipedia.org/wiki/List_of_countries_by_military_expenditures
Of course, a lot of that is borrowed from the Social Security Trust Fund. Gotta keep the world safe for ExxonMobil! Speaking of which, didn't we break up Standard Oil once, for good and sufficient reason. What the hell happened?

[Ghost of Perry Maxwell]

Liechtenstein has a good tax rate and I dare say its prettier then SoCal

[Taylor Anderson]

Once again, it would be helpful if people like Professor Burman considered more than just income taxes. With just medicare and federal and state income taxes, Mickelson is at 50+%. What about social security, property taxes (which could include state, county, city and school), ad valorem, sales, utility, etc.?

How can anybody judge the job KPMG is doing when they can't even get the types of taxes right? Maybe we should pass judgement on you for your inability to get the laundry list of taxes people pay correct? I mean a supposed "tax policy expert" shouldn't miss these things, should he?

[Hawkeye]

@KLG: Thank you, I admit that's what I thought...

[RickABQ]

Looks like Phil is walking it back....

http://blogs.golf.com/presstent/2013/01/phil-mickelson-apologizes-for-comments-on-taxes.html

[Press Agent]

I went over to read the post about Phil that RickABQ posted and found this:

http://blogs.golf.com/presstent/2013/01/paulina-gretzky-dustin-johnson-beach-photo.html?sct=obinsite

Much more interesting than taxes.....

[Marker81]

I find the backlash against him sad. Sure he is and always will be a bit of a whiner but this is just a public airing of decisions that are being made my many californians and residents of other states as well. When over half of the money you earn is vanishing, only a idiot wouldn't consider options. Policies have consequences and the man is being lambasted for simply pointing out one of them.

[digsouth]

Press Agent- women learn to do that ''arm squeeze'' at an early age-- Squeeze 'em and let the boys go wild.

KLG-- What happened? Well, while the GOP was running cover by the Monica madness, and the 75 million dollar (or whatever) porn report posted online before it was even given to Clinton's lawyers--- the REAL politicing was going on--- both mergers of big oil --ExxonMobil, GulfTexaco, Or whatever - I try to not think about the scamming as I just get angry all over.... and not to let a good smokescreen go to waste, the Banks did quite a bit of merging, with stamps of approval--- the phone regrouping has taken a little longer, but don't worry, the pool of suppiers is growing smaller, and the monopolizing of America's big industries is in full swing, courtesy of the no party system- we only have incumbents, and millions spent on ''elections'' to provide income to the TV empires, which, coincidentally, are becoming owned by fewer companies all the time. NBC/Golf Channel- simply an appetizer for the meals that go on with ull blessing of the ''regulators.''

Clinton, the Bushes and Cheney were all laughing about the dumbass Americans losing sleep over ''is is'' while the paperwork flowed over mergers, and the stage was set for the biggest pocket lining in history, courtesy of the privatizing of the militaries services.

Cornholed again.

[DTF]

Seve, you had me for about 15 seconds there.....good one ;)

T. Holman, lots of little tricks can help a guy like Arnie out. One way is to move to FLA to decrease the tax burden. Another is to endorse an illegal driver to increase revenues. Then you can run your PGA Tour event as for-profit without telling anyone, that adds 7 figures to the bottom line every year. Etc...

This help ya better understand it?

[Smitty]

All I know is that EVERYTHING in government winds up costing 3X the original estimated amount. That means 67% of the money I give government is wasted. Which means my taxes should be 67% smaller. In my mind, we should just have ten tax brackets, based upon percentage of income, i.e, 1% tax for income earners in the bottom 10% of earners, 2% for the next ten percent of earners, and so on. With NO CREDITS OR DEDUCTIONS!

My tax form should be the length of West Virginia's: A half-page.

[KLG]

As they tell the children at a very young age around these parts: "Honey, we never talk in public about our money or our religion."

[JJ]

I am sure Phil is getting good advice and I imagine it is focused on what he can save by moving. He was just winging it on the total rate. FWIW, he now (and will always) pay state taxes on winnings in any state where he makes the cut. California then credits him on taxes paid to other states and he still owes them the difference between what he has already paid (hopefully to Georgia) and the California rate. Plus they nail him on all the endorsement income. If he moves to a zero tax state he won't save the full 13.3% from California, probably only half to 2/3 of it. Then again 7% of 100 million could be the difference between just getting by and the good life.

[DTF]

Was it the UK that tried to tax pro's on their ball/shoe/club endorsement income if they showed up for The Open Championship? Whatever happened with that?

[handbraketurn]

I hope he's not including his investment income in that figure. If so he needs to call Mitt to get some tax advice. In any event, if our/republican candidates would stop pushing social issues then maybe we could get someone elected who believes in lower taxes.

[Steve]

Smitty...I agree. Whether you make 50K or 500 million, when you know that the money you pay in taxes is spent in an unefficient manner, why would you want to give the government more of it then you have to?

I spent 8 years in the public sector and the waste was staggering. We had 12 people in my department and we could have easliy functioned just as efficiently with 5 or 6. There were 2 or 3 people that did literally NOTHING (other than gossip) most of the day,and 5 or 6 more that considered 2 hours of actual work in the day a lot. And of course everything we bought was non-bid and usually from a friend or family member of one of the "higher ups" at 50% above cost.

And while it may seem like whining when someone has millions of dollars and can afford to pay more...we can all relate to not paying more than you have to for certain things. If a cup of coffee at Starbucks went up to $10, should we just accept it as those if you are already going there for a $5 cup of coffee, then you can probably afford a $10 cup as well?

[Kevin part deux]

The professor forgot to include jet fuel taxes.

[Will o'the Glen]

It's not about how much Lefty pays, it's about how much he has left -- which is more in ONE YEAR than many people earn in a lifetime.

Stop whining, Phil…

[MattS]

"presumed rational breaking-point where toil and trouble are no longer worth the effort?"

A co-worker's husband owns a small company. A few years ago he was deciding if he should bring on another employee to boost sales higher. After all the tax costs involved were added up he decided to not higher someone and just stay the same size. So the economy lost out on at least another job (not counting the up and downstream impacts of that job). So that (for him) rational point had already been met.

[Danny]

For all the people who say Phil should be a teacher or whatever maybe you should turn it around and see how you would do as a golfer. He started with nothing and made himself what he is today. He didn't have a safety net or any steady paycheck. Try going to work each week and not know if you are going to make anything. I know that is not where he is today but that is because he busted his but and succeeded without any government help! Trying to tell someone what to do with their money is like trying to tell someone how to raise their children.It doesn't matter how much he makes it is his money and he earned it!

[DTF]

Press Agent, that's quite a find there!

I bet the sponsor, Sony, isn't all that thrilled with the disclosure those pics provide. Maybe it was that ol' "back flu" flaring up on him again ;)

[DTF]

PS...those are real, and they are spectacular!

[Frank on OI]

I don't care how much money Phil makes. He earns it. So the harder you work and the more successful you are, the less you are entitled to your gains. Why is someone who hasn't earned it then more entitled to it than the person who made it happen. Phil, you have the right to your opinion and you were wrong to apologize, but oh so politically correct.

[Beagle]

Whether you agree with Phil or not, I wish people would stop saying that he just "plays a game for a living" implying that his viewpoints aren't valid because of it. I am sure he's worked damn hard for his success. He's earned what the market will bear. And playing golf is for the most part no more or less important than pushing keys on a keyboard for a living which is what most of us do.