Phil Mickelson to pay at least 61% in income taxes on last 2 wins

[Guest032516]

The 61% includes 13+% tax in California, which does NOT have a foreign tax credit.

It also doesn't include the 10% he gives to the caddy.

http://losangeles.cbslocal.com/2013/...-to-back-wins/

Phil hasn't indicated if he will leave California, but his house is on the market.

[CJ7]

Under current tax rates, Mickelson would pay 13.3 percent in state income tax and 39.6 percent in federal income tax. That's 52.9 percent combined. Medicare and Medicaid is an additional 2 percent. The new health-care levy is .9 percent on earned income and 3.8 percent on investment income.
Self-employment taxes could total an additional 15.3 percent -- but that's only on income up to $113,000, accountants say. After that the rate is 2.9 percent.
Mickelson would also pay local taxes where he plays tournaments. That could add another one percent or two percent.
So the maximum Mickelson could pay in state and income taxes, payroll and other income-related taxes would be around 60 percent.

But that rate is only if he did absolutely no tax planning or basic deductions. He would, for instance, get a deduction on his state income taxes from his federal. He would also deduct any golf-related expenses as a business expense. He probably puts money in a retirement plan, which is tax-favorable.
I would guess that Mickelson has some investments, which would be taxed at the lower capital gains rate of 20 percent (or 23.8 percent with the new health-care tax). And I would guess he might have a mortgage deduction, or other deductions related to kids and education.
And we know that Mickelson gives money to charity. So that would be deducted as well. If he has trusts (which he likely does) that also reduces his tax rate

[timpage]

Originally Posted by ExNYer

The 61% includes 13+% tax in California, which does NOT have a foreign tax credit.

It also doesn't include the 10% he gives to the caddy.

http://losangeles.cbslocal.com/2013/...-to-back-wins/

Phil hasn't indicated if he will leave California, but his house is on the market.

I just breezed through your link but it looked like the rate you cite is the result of taxes on the income originating in Britain and Scotland....correct? Has nothing to do with US federal income tax. I guess if he didn't want to pay those taxes, he shouldn't go play golf over there? Should there be an exception for already fabulously wealthy Americans who make scores of millions of dollars for hitting a small white ball into a hole?

I seriously doubt that he is paying an effective tax rate of 61%. Don't get me wrong, I'm sure he is paying lots in taxes. But, it's not 61%. I'm having a hard time getting too choked up over it....he's going to be taking home well in excess of a million dollars for two weeks worth of "work".....playing golf.

[CJ7]

10 to 1 Phil doesn't give up his Jet Card and fly commercial .

[timpage]

Originally Posted by CJ7

10 to 1 Phil doesn't give up his Jet Card and fly commercial .

He may have to....times are obviously hard.

[Whirlaway]

His house in Rancho Santa Fe is back on the market; Hope Phil has had his full of paying more than his fair share in taxes..........about time he wakes up and exits to Florida, Arizona, or Texas.

The state tax savings could set up a very nice charitable foundation.............instead of flushing it down the liberal sespool of Californiacation.

[IIFFOFRDB]

Originally Posted by CJ7

Under current tax rates, Mickelson would pay 13.3 percent in state income tax and 39.6 percent in federal income tax. That's 52.9 percent combined. Medicare and Medicaid is an additional 2 percent. The new health-care levy is .9 percent on earned income and 3.8 percent on investment income.
Self-employment taxes could total an additional 15.3 percent -- but that's only on income up to $113,000, accountants say. After that the rate is 2.9 percent.
Mickelson would also pay local taxes where he plays tournaments. That could add another one percent or two percent.
So the maximum Mickelson could pay in state and income taxes, payroll and other income-related taxes would be around 60 percent.

But that rate is only if he did absolutely no tax planning or basic deductions. He would, for instance, get a deduction on his state income taxes from his federal. He would also deduct any golf-related expenses as a business expense. He probably puts money in a retirement plan, which is tax-favorable.
I would guess that Mickelson has some investments, which would be taxed at the lower capital gains rate of 20 percent (or 23.8 percent with the new health-care tax). And I would guess he might have a mortgage deduction, or other deductions related to kids and education.
And we know that Mickelson gives money to charity. So that would be deducted as well. If he has trusts (which he likely does) that also reduces his tax rate

Come on, Sport. Remember we talked about this.

http://www.nbcnews.com/business/mick...inks-1B8057229

[Guest032516]

Originally Posted by CJ7

Under current tax rates, Mickelson would pay 13.3 percent in state income tax and 39.6 percent in federal income tax. That's 52.9 percent combined. Medicare and Medicaid is an additional 2 percent. The new health-care levy is .9 percent on earned income and 3.8 percent on investment income.
Self-employment taxes could total an additional 15.3 percent -- but that's only on income up to $113,000, accountants say. After that the rate is 2.9 percent.
Mickelson would also pay local taxes where he plays tournaments. That could add another one percent or two percent.
So the maximum Mickelson could pay in state and income taxes, payroll and other income-related taxes would be around 60 percent.

But that rate is only if he did absolutely no tax planning or basic deductions. He would, for instance, get a deduction on his state income taxes from his federal. He would also deduct any golf-related expenses as a business expense. He probably puts money in a retirement plan, which is tax-favorable.
I would guess that Mickelson has some investments, which would be taxed at the lower capital gains rate of 20 percent (or 23.8 percent with the new health-care tax). And I would guess he might have a mortgage deduction, or other deductions related to kids and education.
And we know that Mickelson gives money to charity. So that would be deducted as well. If he has trusts (which he likely does) that also reduces his tax rate

Originally Posted by timpage

I just breezed through your link but it looked like the rate you cite is the result of taxes on the income originating in Britain and Scotland....correct? Has nothing to do with US federal income tax. I guess if he didn't want to pay those taxes, he shouldn't go play golf over there? Should there be an exception for already fabulously wealthy Americans who make scores of millions of dollars for hitting a small white ball into a hole?

I seriously doubt that he is paying an effective tax rate of 61%. Don't get me wrong, I'm sure he is paying lots in taxes. But, it's not 61%. I'm having a hard time getting too choked up over it....he's going to be taking home well in excess of a million dollars for two weeks worth of "work".....playing golf.

The article says 61% and it appears Forbes ran the numbers, so I will take their word over either of yours.

Also the 61% is just for what he earned in the last 2 weeks. I'm not discussing, and the article did not mention, capital gains rate. If you DID pay a tax of 61% on your earned income, it is not consolation to you that your stock dividends are only taxed at 20 or 25%.

Also, at his income level, the mortgage deduction isn't worth shit. It is capped at a low level so it is useless on a home worth $7 million - which is something I agree with. The government has no business subsidizing houses. But that is another discussion. I'm simply pointing out that mortgage interest deductions don't amount to shit. And that assumes he even HAS a mortgage. He might well have bought his home for cash.

And, yes, it is money earned in England and Scotland, so it will be slightly higher than if he won both tournaments in the US. But, it doesn't appear to make a lick of difference to California. While the US government gives a tax credit for the tax you pay to a foreign government, California wants a full 13.3%cut of EVERYTHING you earn.

Which brings up an interesting question: What would happen if Phil won big in some socialist country that had a 90% tax rate on high earnings? If California wants 13.3% and won't give a tax credit, would Phil have to pay a 103.3% tax rate? Could he actually lose money by winning?

I don't think there are currently any countries with 90% tax rats, but I believe that in the 1970s, one or more Scandanavian countries had 90% rates.

[WTF]

Originally Posted by Whirlaway

His house in Rancho Santa Fe is back on the market; Hope Phil has had his full of paying more than his fair share in taxes..........about time he wakes up and exits to Florida, Arizona, or Texas.

The state tax savings could set up a very nice charitable foundation.............instead of flushing it down the liberal sespool of Californiacation.

He better get a shitty house if he moves here to Texas...he will shit his pants when he see's out property tax rates.

[Ducbutter]

The article in the L.A. Times also said that Mickelson would have to pay taxes on the endorsement money he earned while he was in Scotland. They gotta pay for the NHS somehow, eh?
Coming to a theater near you!

[CJ7]

if Phil doesn't have a cpa that takes every tax advantage available, he deserves to pay 60%


and for all the Forbes belivers, you can bet your ass he does.

[CJ7]

Originally Posted by IIFFOFRDB

Come on, Sport. Remember we talked about this.

http://www.nbcnews.com/business/mick...inks-1B8057229

my source
http://www.cnbc.com/id/100398096

[Budman]

Originally Posted by timpage

I just breezed through your link but it looked like the rate you cite is the result of taxes on the income originating in Britain and Scotland....correct? Has nothing to do with US federal income tax. I guess if he didn't want to pay those taxes, he shouldn't go play golf over there? Should there be an exception for already fabulously wealthy Americans who make scores of millions of dollars for hitting a small white ball into a hole?

I seriously doubt that he is paying an effective tax rate of 61%. Don't get me wrong, I'm sure he is paying lots in taxes. But, it's not 61%. I'm having a hard time getting too choked up over it....he's going to be taking home well in excess of a million dollars for two weeks worth of "work".....playing golf.

That seems to be the liberal mindset. Since it's somebody else's money it's OK. I'm sure if you had to pay 60% of your salary you would be pissed. Being "RICH" is very subjective. It all depends on where you are in terms of income on who you may think of as being rich. If you make $100,000 per year you are probably thought of as rich to the family making $20,000 per year. So in your mind it's OK for Phil to be taxed at 60% because he makes so much more than you. Kind of a shallow way of thinking but not unexpected from a liberal.

[JCM800]

you can always buy the dudes house .....help him out a little

[Doove]

Originally Posted by Budman

That seems to be the liberal mindset. Since it's somebody else's money it's OK. I'm sure if you had to pay 60% of your salary you would be pissed....So in your mind it's OK for Phil to be taxed at 60% because he makes so much more than you. Kind of a shallow way of thinking but not unexpected from a liberal.

Apparently you missed the part where he said "...i'm sure he's paying a lot in taxes. But it's not 61%".

Funny, since it was the very sentence prior to the one you high-lighted in bold. Easy mistake, i guess.