Q. When you’re asked about Stricker’s semi-retirement, with the political situation the last couple months, blah, blah, blah, what did you mean by that? Do you find it an unsettling time in a way?
PHIL MICKELSON: Well, it’s been an interesting offseason. And I’m going to have to make some drastic changes. I’m not going to jump the gun and do it right away, but I will be making some drastic changes.
Q. Meaning leaving from California?
PHIL MICKELSON: I’m not sure.
Q. Moving to Canada?
PHIL MICKELSON: I’m not sure what exactly, you know, I’m going to do yet. 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.
To be honest, it’s hard to blame Mickelson – who has compiled a net worth approaching $180 million by repeatedly striking a tiny white ball until it falls into a hole — for putting all options on the table, which according to some, include the possibility of prematurely shutting down his career to avoid his rising tax burden. Let’s take a look at what Mickelson is up against in 2013:
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.
And then there’s the impact of Obamacare. When you consider that from now on, Mickelson will be liable for an additional 0.9% tax on his self-employment income and 3.8% tax on his net investment income after each exceeds $250,000, what’s left over from the multi-million dollar endorsement deal requiring him to sport a Rolex watch while playing private courses in exotic locales hardly seems worth it.
If you think perhaps Mickelson is being a bit of a baby for threating to end a career that’s earned him a spot on this list of 10 wealthiest athletes on the planet because of some tax increases, understand that he’s getting hit on the state level, too. In November, California passed Proposition 30, which increases the top income tax rate on resident millionaires to 13.3%, a drain on Mickelson’s take-home pay that may force him to sell his 9,500 square foot mansion and flee his home state in search of more friendly pastures.
Should Mickelson follow through on his promises, he is fortunate that there is no shortage of countries across the globe that offers an opportunity for a man to earn exorbitant riches by playing a game. But I, for one, would encourage Mickelson to stay the course, continue to fight the good fight, and hire a savvy tax advisor. He shouldn’t have to look too far; after all, one of the sponsors that paid Phil an estimated $44 million in 2012 was KPMG.
One thing about Canada - there is no inheritance tax.
“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.”
...this guy is a MAJOR LEAGUE RICHARD NOGGIN!!
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“To be honest its hard to blame Mickelson...” Um, no. I don’t blame him at all. He is trying to protect WHAT HE EARNED.
More likely is the fact that he has accumulated more money than he could ever spend so why would you continue to play.
By the way, most people work all their lives to be able to retire and play golf in their golden years. What does a professional golfer do when he retires?
As they say, people vote with their feet.
Next thing we know, Bronco will release an Exec. Order which freezes the bank accounts and confiscates the property of all millionaires who have the chutzpah to relinquish their citizenships in favor of becoming citizens of a country whose laws reflect that what you earn is yours, and not the gubmint’s.
That writer wouldn’t have dared to write the same article on Tiger Woods making his move to FL.
Very punny.
Phil Mickelson has been a tremendous asset to the game of golf. A legendary player and a real gentleman.
I don't blame him...I wouldn't work that hard for a measly 20 million take home pay, per year...