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61 Percent Tax on Winnings is Pure Lunacy


 

 

PHIL MICKELSON RECENTLY WON TWO GOLF TOURNAMENTS; YOU WON'T BELIEVE HOW MUCH HE HAD TO PAY IN TAXES ON HIS WINNINGS

 

With back-to-back wins in Europe including his 5th Major tournment of his professional career Phil Mickelson should be basking in the glow of his golf prowess and rolling in cash. And, while the former is true, the latter is not, on a relative scale.

 

The Los Angeles Times reported this week that Lefty earned more than 2.2 million dollars with his wins at the Scottish Open and the British Open the last two weeks. Quite a haubl for a golfer that was told his game didn't cater to the links courses overseas. What many people do not know is that because of exhorbinant tax rates in Britain, Mickelson has to take a 45 percent tax hit to his largesse. Since Mickelson resides in California he will also have to pay an additional 13 percent in state taxes. According to Forbes magazine, Mickelson will not only have to pay tax on his winnings, but also any income derived from bonuses and endorsements that he earned while playing there.

 

Mickelson will get to use a foreign tax credit and be allowed to offset much of his tax burden to the feds. But, when you add it all up he will have to fork over roughly 1.4 million dollars in taxes to Britain, the Federal Government and the State of California. What's wrong with this picture ?

 

We all know there are serious flaws in the tax code that allow the wealthy to offset tax burdens with targeted loop-holes. It's how corporations make millions, even billions without the tax implications faced by the common man. I get it. The deck is stacked because politicians are paid off. Until we move to a flat tax without these specific targets the deck will always be stacked against the common man. The California and New York tax codes are also why big business moves to states like Florida and Texas. Why pay state taxes when you don't have to ?

 

I just find it incredibly distasteful to penalize success. Mickelson EARNED his 2.2 million dollar pay day with his talents. Mickelson EARNED  these endorsement dollars with his unique talents. I believe in everyone paying their fair share. But, why do highly sucessful people have to pay 61 percent of their EARNINGS to taxes. Granted much of this penalty comes from Britain, where the astronomical tax rates make for public debate all the time. But, if you don't think we are steadily moving to a similar situation in this country then you just aren't paying attention.

 

Do I feel sorry for Phil Mickelson ? No. He is successful and well-paid for his talents. But, I also believe the wealthy and rich are disproportionately penalized through the tax code for their success. While the ultra-wealthy take advantage of targeted tax loop-holes that give them breaks, there is also a climate in this country where the have-nots expect to be taken care of by the well-off and successful. I don't understand this thinking. No one owes their fellow man a living. If we had an across the board flat-tax where everyone paid the same rate, fairness would ensue and I think personal responsibility would reign supreme.

 

Phil Mickelson caught heat a few months back for criticizing the tax rates in the State of California. He said he would have to move out of the state because the costs of living in the state were prohibitive. People saw it as a rich guy complaining about the hard-ships of making millons. It was not smart for Phil to take this tact. Ultimately it would have been better if he just did as we all do, just bitch to his wife Amy in their living room about the inequities in the tax code.

 

In the end Phil made more than 2.2 million dollars with two golf tournament wins in Europe, yet will clear, according to the LA Times 842, 000 dollars. Not a bad take for a few weeks work. But, with this 61 percent tax hit, I can understand why the wealthy are growing sick and tired of paying into a system that is only getting worse, while the minions continue to lobby for continued penalties (taxes) on the wealthy.

 

 

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