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« Ogilvy Getting Into Politics, PGA Tour Style | Main | Finchem On Bifurcation, Anchoring & Taxing The Hell Out Of Smoking »
Wednesday
Jan232013

Phil Finally Speaks, Finally: Tax Preparation, State Of California & Winged Foot Lay-up Edition

Unaware that he was keeping the media from enjoying National University Golf Academy's soft taco-sponsored and prepared (by-chef-Andrew Bard) lunch, Phil Mickelson spent nearly an hour in the Torrey Pines parking lot either...

(A) trying to pry loose his Journey greatest hits CD lodged in the car player.

(B) regrouping after his 5 hour pro-am round by showing PR man T.R. Reinman how to use TurboTax

(C) plotting how he would best defuse the uproar over his tax policy remarks and ensuing apology.

For the answer, let's go to the transcript...but judging by the quality of his analogy, the time was well spent.

Q.  Phil, what have the last 72 hours been like for you?

PHIL MICKELSON:  Interesting (smiling).

Q.  Could you elaborate?

PHIL MICKELSON:  Karen, this reminds me a lot of Winged Foot in 2006, where I hit a drive way left off the tents.  So this happened to be way right, but way off the tents.  You know, I've made some dumb, dumb mistakes, and, obviously, talking about this stuff was one of them.

Like Winged Foot, where I tried to carve a 3‑iron around a tree and get it up by the green, I make double bogey and lose the U.S. Open, I think I'm going to learn my lesson and take a wedge and get it back in play.

I made a big mistake talking about this stuff publicly, and I shouldn't have done that.

Q.  You said you took that wedge and hit it the wrong way.  But, in reality, you didn't say anything wrong.  You just said things that you feel.  Do you feel it's unfair that there are people out there attacking you for something you said that isn't technically wrong, in fact, it's quite technically correct.

PHIL MICKELSON:  My apology is for talking about it publicly, because I shouldn't take advantage of the forum that I have as a professional golfer to try to ignite change over these issues.

I should have talked about ‑‑ because I don't have a plan formulated yet on what I'm going to do.  And when I do come up with a plan, and Amy and I have talked about it, and we've been working through this for a while, and I'll be able to talk more about it publicly then.  But I shouldn't have brought it up publicly and used this platform as a way to say what I had to say.

And then...

Q.  I'm curious from the statement that went out Monday night, what triggered your thinking that I need to address this now and say what you did Monday night?

PHIL MICKELSON:  I think that it was insensitive to talk about it publicly to those people who are not able to find a job, that are struggling paycheck to paycheck.  I think that was insensitive to discuss it in that forum.  So that's why I issued a statement, because I shouldn't have brought it up at all, and I didn't want to wait until today.

Regarding the Padres…

Q.  But at the end of the day, was it something that you wanted that you couldn't fulfill, or is it something that you weren't sure about and decided not to do?

PHIL MICKELSON:  I just didn't feel I was able to commit to being a part of the community at the time.

Regarding California...

Q.  Here, in your statement, you've said it's a private decision and something that you and your family need to discuss, and ultimately whatever decisions are made will be made by you and your family.  But to what extent are you sharing with others your situation, and are you hearing similar circumstances for those who you associate, friends, neighbors, that kind of thing?

PHIL MICKELSON:  We have talked and will continue to talk to the best tax advisors and what have you.  I've certainly ‑‑ well, I love this state.  I grew up here.  I love it here, and I'm certainly concerned for it.

On the anchoring debate, this was interesting with regards to the Tour making its own rules:

PHIL MICKELSON:  First off, I think that the athletes should not be making the rules.  The PGA TOUR should not be making the rules.  We need an independent entity.  I remember a conversation I had years ago with the commissioner about this, and it made perfect sense to me, that we have such varying views on things that to try to make rules internally that would be favoring some and not others as the wrong way to go about it, and we need to have an independent organization, in this case, the USGA and/or R&A as our governing bodies making the rules.  We should not interfere.  I do agree with that.

But as far as the anchoring, I have very mixed feelings on this.  Because, although I feel that anchoring should not be part of a golf stroke, it was allowed 30‑some‑odd years ago and should not be taken away.

I feel that from studies I've heard of, specifically from Dave Pelz and his schools, that it's potentially half a million to a million golfers who would be so embarrassed at this inability to make a three‑foot putt with a regular putter that they may quit the game.  And I care about the game.  I want the game to succeed, and I don't want that to happen.

I feel it's unfair for the players that have been putting that way for quite some time with the understanding that it was legal.  So I have very mixed feelings about that.  It should not have been allowed 30 years ago, but once it was allowed, I don't know how you change it.

On the North Course redo:

PHIL MICKELSON:  We've been out on the course quite some time,  spent a lot of time coming up with plans on each holes.  In fact, three holes are out there, pictures and remnants of what it will look like.  But I have very strong opinions on golf course architecture because I want to promote the game.  And this is a perfect opportunity for me to present my thoughts, which is, we need to have parameters left and right, not front and back.  We need to give the ground an opportunity for the player to run the ball on to the green.  We can't have these forced carries.

The Torrey North project is an awesome project too because there's been so much grass put in that separates the holes from the canyon that we'll be able to bring some of that canyon element, that environment, that sand, and bring it back into the golf course and make you feel like you're part of the canyon.  That it's right there.  Still being playable, still being able to find your ball, but getting rid of acres of grass which would ultimately lower maintenance costs and lower water costs quite a bit.

And I think it would make the golf course with the same green fees much more profitable than it currently is.

And back to the taxes issue, it seems something has changed for him.

Q.  Back to the taxes.  I think you expressed something a lot of people feel.  Nobody likes to pay their taxes.  I'm just curious when you're faced with a huge tax bill, what does that feel like for you?

PHIL MICKELSON:  Well, I love this country, and I love the opportunities that it's afforded me to be successful and to do what I love.  So I've never had a problem with that before.  I've never had a problem paying my fair share, because I know there are very few countries in the world that let you do what you do and live in this environment and have your personal possessions be secured through the court systems, through the police, through all the many things that this country offers.  So I've never had a problem with that before.

Q.  But you do now?

PHIL MICKELSON:  I've never had a problem paying my fair share.  I don't know what that is right now, but I've never had a problem paying my fair share.

And the closer...

Q.  Did you get any "What were you thinkings?"

PHIL MICKELSON:  Only from me and my family, coach, D.R., a bunch of emails, yeah.  Of course I got "What were you thinking," absolutely.  Myself, sure.  Thanks, guys.

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Reader Comments (75)

What struck me most about this bit of impetuousness from Phil was the way the "media," such as the morons at "Morning Drone," immediately predicted a "backlash." i.e. Another millionaire griping about higher taxes. Apparently what has actually occurred is that virtually everyone (read: "libs" and "cons") has sided with a guy who has paid a TON of taxes in his life but isn't particularly happy about being dinged for more. Fact is, while most people support what taxes actually DO (roads, schools, police, fire, etc.) most of us -- even in California -- aren't crazy when the Moonbeam Governor simply says "We want more." You make $400,000 per year and now have to pay, say, another 10%. That's $40,000. But if you make $40 MILLION a year, you now owe another FOUR MILLION. Who's going to be happy with that?

Look, we all know that golfers live in Florida and Nevada not just because of the weather but as Tiger freely admitted Tuesday, because neither state has state income tax. Forget the income disparity between you and Phil; isn't it every citizen's RIGHT to want to keep as much as they earn as possible?
01.23.2013 | Unregistered CommenterBenSeattle
I've never had a problem paying my fair share. I don't know what that is right now, but with all the options I'm considering that share is zero.
01.23.2013 | Unregistered CommenterG
Ben,, easy with all this "RIGHT(s)" talk...that's soooo 2003 and has no place in today's society ;)

Ok, pass the Hope Bong please - let's all take a toke, from the Bong of Hope...
01.23.2013 | Unregistered CommenterDTF
It just dazzles me the way silly, innocent, meaningless comments from famous people become news, big news, BREAKING NEWS! Gawd, this stuff is just so frivolous and we get it pounded down our throats non-stop. It's bath water.
01.23.2013 | Unregistered CommenterBobby D
Absolutely, Ace. He can move wherever. I'm not calling him on choosing a home based on where he pays less tax. I'm calling him on the flimsy BS in his statement. When he goes from paying "too much" state tax to paying no state tax, it's clear that his definition of "fair share" has become zero.
01.23.2013 | Unregistered CommenterG
I still think that deep down, Phil is a decent guy. He says crazy stuff some times but he rarely (if ever) backs away from it. I wish every guy on the tour was as forthright. He's a breath of fresh air.
01.23.2013 | Unregistered CommenterJesse
He's a breath of horsesh#%.
01.23.2013 | Unregistered Commentertlavin
Sure, I suppose zero is a fair share of zero, Ace, if you're willing to stoop to that.
01.23.2013 | Unregistered CommenterG
When the 16th Amendment was passed in 1913, only 0.50% of income earners were affected. Those earning earning $6 million in today's dollars paid 7%. I think 7% is a fair share for federal income taxes.

Do you think Phil ever makes the connection between his worship of the military, a trillion dollar "defense" budget, and high taxes?
01.23.2013 | Unregistered CommenterChema
Sounds like he handled the situation like a man. Looked people in the eye, answered questions and explained why he regretted his comments.
Phil's a dag and his comment was a beaut.

All you battlers quit the whinging and harden the f^%# up!
01.23.2013 | Unregistered CommenterChopper Read
"a million golfers who would be so embarrassed at this inability to make a three‑foot putt with a regular putter that they may quit the game." Who knows the number but its a real issue.
Soft Rules of Golf change- the third putt is given.
Did anyone else see the Brit pro 4 putt from 6 feet at the weekend?
Phil is not the sharpest tool in the shed.
01.23.2013 | Unregistered Commentergreg c
Nice job by his PR folks making the "paying my fair share" flash cards!

If we could just get taxes back down to where they were under Reagan, everyone would really be paying their fair share.
01.23.2013 | Unregistered Commenterreef
@Colin..... A few years back Aussie lefty Greg Chalmers had a horrendous 4 putt from around 3 or 4 feet during an event in Australia. Was shocking as he is widely considered a fine putter. Guess it happens.
01.23.2013 | Unregistered CommenterOWGR Fan
Using The Reagan credit card?

That'll work.
01.23.2013 | Unregistered Commenterdigsouth
"No matter what you feel about taxes, the complaints were coming from a guy who is left with tens of millions of dollars AFTER meeting his obligations to local, state and federal governments. With millions still jobless in the painfully slow recovery from The Great Recession, many found Mickelson's comments self-serving, selfish and frightfully not self-aware. Clearly, by Wednesday he was aware of that."

What an utter load of crap. Phil's problem is about paying over 50% of his income to an overbearing nanny-state government that hasn't been able to provide decent services or balance it's own budget in decades. Meanwhile over half of CA residents pay no taxes at all. Ron Sirak is just spouting more lefty-populist pap. He probably doesn't even realize it. I'm with Phil on this one and no, I don't think he had to apologize for anything.
01.23.2013 | Unregistered CommenterDatou
"overbearing nanny-state government"

Really?

Is that the same nanny state that let's you sell machine guns to lunatics?

Not the sort of nanny I want looking after my kids.
01.24.2013 | Unregistered CommenterAlan
Stanford student---says nothing. moves to a state with no income tax the moment he turns pro. plays only two events per year in CA.

Arizona state student--moves FROM arizona to CA, plays a huge chunk of the west coast swing, and compalins publicly about his taxes.
01.24.2013 | Unregistered CommenterEd
Nice bit of fence-sitting there Phil ... not!

Never fails to amaze when those supposedly 'in the know' can still manage to be selective memory-wise. The "inability to make a three‑foot putt"is precisely why a blind eye was turned for the last three decades.

It's the young so-called but with absolutely no pride twitchless bucks who are to blame for taking away golf's putting crutch from the great unwashed.
Brown, you said it best.

Some people think there is no difference between $5mil and $45 mil, and since $5mil is enough to live on then the person should be made to give the $45mil back to the gov't (aka, the people). They don't seem to understand that the potential for taking home more money is a motivating factor to nearly all people. Example, after Tiger dominated years ago the prize money on Tour skyrocketed and other pros gained motivation to get better, in part because they wanted a piece of the pie and also because they wanted to beat the new phenom.
01.24.2013 | Unregistered CommenterFLGolfer
What's happening to Phil is completely unfair, and all because he was somewhat honest and simply spoke out in the wrong forum. He could easily have kept his mouth shut LIKE THOUSANDS of other extremely highly paid athletes that take their money and make tax saving moves and horde it all, but never say a word about it to anyone. So someone can criticize Phil for being a bit dumb and casting a spotlight on himself when he could have easily just gone about his business un-noticed like almost all other professional athletes, but it's not fair to single him out for doing what they all are doing, and most - like Tiger, did way way before Phil did.

Someone should do some quick math and figure out roughly how much Phil has paid in tax up till now - my guess is the amount is astronomical.

Everyone dances around the fact that most of these "foundations" created by golfers and other athletes are really just tax loopholes that allow them to make some charitable contributions, but really it's all about tax savings.

How many millions of people can't make a proper golf swing and are embarrassed when they play golf? But really it's the 3 - foot putt that makes them quit the game? No chance. Anybody that loves the game enough to grind over a three foot putt with their buddies and a fiver on the line - is not going to quit just cause they can't use a putter a certain way.

@ Brown & Brown Jr. You both don't even know what a liberal is. Wikipedia has a nice page on Liberalism - give it a read.

@ Brown, I suggest you read about the fall history's great empires, what's happening now has happened countless times over. What you will notice is that empires almost never fail because of trying to help their citizens maintain a certain standard of living, it's usually because they over extend themselves militarily. When you factor in a number of other factors involving a corrupt pseudo-capitalist system run a muck, its' all there right in front of you.
01.24.2013 | Unregistered CommenterPress Agent
Still not a Phil fan, but at least he walked this back the right way, IMHO.

People can disagree on what is appropriate tax levels and structure of taxes, etc. And, Phil can have his opinions. But, at least he realizes that a guy makes 60 million a year complaining about only having 25 million after taxes doesn't sit well to the guy who's down on his luck.

As for all the political banter out of this, lighten up people. We can agree to disagree on these issues, but seriously anyone who thinks California is a socialist paradise or that the black helicopters are coming and the rich are all going to move to their Randian utopia need to seriously loosen the tin foil hat and get some blood flowing again.
01.24.2013 | Unregistered CommenterThe O
@PressAgent finally gets to the real point, especially in the last aside to Brown. The reality is that those living in California have watched as the state bureaucracy has slowly slid into the entropy of corruption. Michal Lewis details how even tiny local governments have become pension and benefit magnets. The story of the obese Bell city council guys paying themselves millions of dollars of tax payer money while streets are crumbling, infrastructure is no longer maintained, and what was once a shining example of what a higher education system could be has sunk into a bottomless pit of rising costs and falling results.

Add to this undermining of local standards and simple administration of the services that affect your everyday life the minute you step outside your home the half-century it has taken the country at large to recognize what Dwight Eisenhower clearly saw the military industrial complex being capable of doing to our system of capitalism way back in the 1950's... and you get what ALL Americans have finally sensed: that government is no longer what it must be for things to work, let alone prosper. And everyone eventually does begin to wonder where all the money they keep funneling to that government is actually going. As they should. Even rich & famous guys like Phil.
01.24.2013 | Unregistered CommenterRLL
I gained a lot of respect for Phil actually talking about an issue that would lead to some blowback. I wish more public figures would express their opinion, but I understand that it is much easier to keep your mouth shut.

I've never been a Phil fan and him apologizing for his statements makes me less of a fan. I think he is only apologizing because he realized it might hurt his reputation and decrease his fan base, which good hurt his potential sponsorship dollars down the road.

Liberals, conservatives, etc. - I don't care - they all suck and neither party will fix the problem. I think the problems are overspending (mostly military), gov't being too large, wasteful spending on programs, entitlement programs, etc.
01.24.2013 | Unregistered CommenterFLGolfer
"Q. You said you took that wedge and hit it the wrong way. But, in reality, you didn't say anything wrong. You just said things that you feel. "


....Please Phil.. put yur foot back in your mouth. yesterday's gone. I need you to say something stupid and on the record TODAY.
01.24.2013 | Unregistered CommenterEd
Ed, that's a good one!

Brown...yup, goes back to what's the definition of rich?

Press Agent, this "foundations are to exploit tax loopholes" thesis is bogus. Now I find some of these foundations to be a bit sketchy but diverting money into the doesn't benefit the player. Here's the math, correct me where I'm wrong...

Let's call him Player P (assume 50% tax rate)....

Scenario A (no foundation):

50,000,000 income
25,000,000 taxes
-------------
25,000,000 net to player


Scenario B (with foundation):

50,000,000 income
6,000,000 donated to foundation
-------------
44,000,000 subtotal
22,000,000 taxes
-------------
22,000,000 net to player

How is Player P better off in scenario B?
01.24.2013 | Unregistered CommenterDTF
Most truly successful people aren't motivated by money - it's more a nice by product.

That being said, liberals don't nearly that much time thinking about taxes, or how to screw rich people (and rich people and Phil all benefit from govt spending as well). As a general rule they spend a lot of time thinking about what gov't should provide. Taxes are the best way to pay for it.

If you want government to spend a lot of money on things and you cut taxes you end up with Reagan and massively high deficits and inflation.

That being said the California State government is a mess right now. Of course liberals are much more open to legalizing the illegals and making them pay taxes, which would help the situation.
01.24.2013 | Unregistered Commenterelf
Why should Phil have to pay extra taxes to subsidize the boondoggle high speed rail project which isn't even high speed?

Why should Phil have to pay extra taxes to cover pension shortfalls that Gray Davis foolishly awarded the public sector with during the dot-com boom?

Why should Phil have to pay extra taxes to UC schools which prefer out-of-state residents because of the higher tuition and CSU schools which are so far left, Glenn Beck would do a documentary on them?

Substitute "Phil" with "a whole bunch of California residents"...

FLGolfer, that is exactly why he had to apologize. I wish Phil didn't apologize, but I can't fault him for it -- speak out against Our Leaders and receive evil tweets//have the media turn on you.
01.24.2013 | Unregistered CommenterDavid
Planet Earth to elf: you must be looking into the wrong end of your telescope. Straw-man arguments like the ones you tapped out above are a big part of the dysfunction that modern day California has morphed into. It has nothing to do with the talking head dichotomy of "liberal vs conservative."

For the record, California thrived under Reagan as governor. And the largely inflation-free environment that has ruled over the American economy for the past 30 years is a direct result of Volcker monetary policy under Reagan as President. What is going to reacquaint Americans with inflation is the policy of Greenspan and Bernanke under Bush, Clinton, Bush, and Obama. (Monetary waves take years and years to play out...) The military-industrial complex has presided over the reign of federal deficits -- and yes, that was accelerated monstrously under Reagan as President. But it was the Family Bush that really spread it across the globe (as opposed to an outer space fantasy of Reagan).

And lastly, Phil isn't talking about any of this. What he's really talking about is the bus driver and faceless staff worker in a small California town now retired with a $200k pension and free health benefits for life, not to mention the state folk in Sacramento who are in the same pockets as Congressional reps in Washington.

Phil made the key feaux pas of our time: speaking the truth.
01.24.2013 | Unregistered CommenterRLL
most business people ARE motivated by money.

Bill Gates didnt put his MSFT stock in a trust for charity when he started. He was trying to make a buck. he started the charity at the END.

Arthur Blank, Larry Ellison,Howard schultz--you name a mother Theresa and i'll name 5 people who were looking to get rich.

If you told each of these people that the govt would take every dollar after the first [insert amount here], every one would have done something different.

How do i know this? look at golfers of the 50s--how many remained amateur because they could make more selling insurance.
01.24.2013 | Unregistered CommenterEd
@ DTF, the foundation is essentially the person, or the person is essentially the foundation. It's a shell game, the money is controlled by the same person at the end of the day, but taxable income is reduced. Applied to more than just athletes, the Bush foundation, the Clinton Foundation... the same deal. Want a fun exercise? try to find out where all the money went that was given to the Bush and Clinton foundations for earthquake relief in Haiti.
01.24.2013 | Unregistered CommenterPress Agent
Careful, PressAgent -- you, too, are now speaking some truth...
01.24.2013 | Unregistered CommenterRLL
@Ed I never said people weren't motivated by money, but there's a difference between solely motivated by money or money would be nice (and when Tiger, Phil started playing golf as kids, while I'm sure the thought of money was nice it's not the primary reason they played). As to your example from the 50, the key word is more money, they aren't going to make more money doing something else nowadays. I have a firm enough grasp on reality to know that when Bill Gates was thinking about starting microsoft he wasn't going to go, well if I get really rich from this I'll have to pay a lot in taxes so let me be a mid level programer instead of pursuing my passion.
01.24.2013 | Unregistered Commenterelf
Press Agent, it still doesn't benefit the player. Phil or Davis are no better off as the result of having a foundation. I recently looked at a 990 for the DL3 foundation and very little money came directly from him - the impact on his personal tax situation was effectively nil. Same for Phil, no impact.

Now the Presbyterian on St Simons is probably a little better off from the $200k that went from the PGA Tour, to the DL3 Foundation, and then $100k was carved out for the church, tax-free. But that had nothing to do with helping Davis reduce his personal tax bill.

Press Agent, you a member of a private club? If so, betcha it is set up as a non-profit and pays no taxes. There's a situation where you can make a difference, get busy!
01.24.2013 | Unregistered CommenterDTF
BTW there are legit arguments for not raising taxes (it creates deadweight economic loss for instance), but high achievers won't feel he need to achieve because they will make less (but still a bunch) of money, just isn't one of them
01.24.2013 | Unregistered Commenterelf
"50,000,000 income
25,000,000 taxes
-------------
25,000,000 net to player


Scenario B (with foundation):

50,000,000 income
6,000,000 donated to foundation
-------------
44,000,000 subtotal
22,000,000 taxes
-------------
22,000,000 net to player

How is Player P better off in scenario B?"

DTF: this is why

Scenario A:

$50M annual income (expected) = $4.16M monthly income (expected)
Tax on annual income above $1M = 50%
$25M annual tax paid (expected) = $2.08M monthly tax paid (expected)
monthly net pay: $2.08M
annual net pay: $24.96M

Player took home $24.96M annual and paid $25M annual.

Scenario B:

Same as Scenario A. Player took home $24.96M annual and paid $25M annually. However, $6M of annual income (expected) was deposited into charity and declared on his tax return. His taxable income is now $44 million

$44M taxable income = $4.16M monthly taxable income
Tax on annual taxable income above $1M = 50%
Annual tax that should have been paid: $22 million.
Actual annual tax paid by the player: $25 million
Refund: $3 million

Player took home $24.96M annual and paid $25M annually. He now gets a refund of $3 million dollars and can buy a couple Ferrari's.
01.24.2013 | Unregistered CommenterOC
OC, that's simply a timing issue....no material impact on the bottom line numbers or the year-end balance in his checking account.

NEXT!
01.24.2013 | Unregistered CommenterDTF
Will every who is against Phil on this issue, AND belongs to a private club, please raise your hand?
01.24.2013 | Unregistered CommenterDTF
But, DTF, you're forgetting all the accountants, tax lawyers, lobbyists, and "legislators" that share a cut along this delightfully zigzagging path to that bulging bankroll in pocket... And that's the motivation, if not the purpose of government... isn't it...? ;=]
01.24.2013 | Unregistered CommenterRLL

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