What do KPMG, Exxon-Mobil, Rolex, Barclay’s Bank and Calloway Golf have in common? All of these corporations are paying tons of money to Phil Mickelson to say nice things about them.
Mickelson is a professional golfer who has won more money playing golf than all but one other person in the history of the game. But his big pay-off comes from lending his name to products and companies. Mickelson earned a total of $53 million in endorsements in 2011 in addition to the $9 million he made playing golf that year. Mickelson routinely has made more than $40 million per annum for years.
And yet he’s complaining that his federal and California state taxes have gone up. After a golf tournament this past weekend, Mickelson made a veiled threat to change his public life because his taxes are too high. His exact words: “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.”
Some pundits think he’s threatening to retire from golf, while others think he’s threatening to relocate to a state that has lower taxes than California.
What’s he really threatening to do is become the poster child for tantrum-throwing selfishness.
Mickelson complains that his tax rate is 62% or 63% of his income. That percentage is completely bogus, of course, because it doesn’t include the many deductions he probably takes and it applies the highest tax rate for both California and federal income tax to all his income, not just the amount above the floor for the highest marginal (or incremental) rate.
But even if we assume that Mickelson is actually paying 63% of all his income in taxes, that means that he and his family would have to get by on a mere $14.8 million a year, assuming he continues to make his low end of $40 million income before taxes. Does that mean more hamburger helper and Top Ramen for the Mickelson household? Of course, he could always supplement the budget by dipping into his estimated $150 million net worth.
Mickelson’s problem could be that he lives in a hermetically sealed environment of golf courses, resorts, country clubs and gated communities in which he only interacts with other golfers and a lot of rich folk who love golf. He may never see the maid who cleans his hotel room, the guy who mows the green, the crews that repair the roads on which he drives or the TV engineer who makes sure his swing is transmitted to the millions of fans watching the tournament on TV. He may have never thought about how much—or how little—money his children’s teachers make, or how much or little the cashier makes who works the cash register where the hired help buy his family’s groceries.
Mickelson may have not done the math, so let’s do it for him: The $14.8 million that he would pocket a year if he only earned $40 million gross and he was taxed 63% on it computes to about 285 times what the average employed Californian earns before taxes.
In his sequestered and rich little world, Mickelson may not be aware of the fact that our roads and bridges need work, that our public schools have been starved of funds, that we need to develop new technologies to address the threat of global warming, that the cost of public colleges is skyrocketing primarily because of a cutback in state support or that millions of people are unemployed or underemployed.
Mickelson may not know that he would have paid more in taxes in 1980, before Ronald Reagan began the conservative retrenchment that has led to the growing inequality of wealth in America. Mickelson may not know that he would have paid more before the Bush II tax cuts for the wealthy. He may not know that he would pay more taxes in virtually any other industrialized country.
I’ve had my fill of selfish a__holes like Phil Mickelson. As far as I’m concerned he can follow the tax avoidance strategy of that overrated French actor Gérard Depardieu, who, rather than pay French income tax, has given up French citizenship and now makes his home in Luxemburg. Maybe like Depardieu, Mickelson will be granted Russian citizenship by Vladimir Putin.
I say, let Mickelson play 18 holes somewhere in Siberia.