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Higher Taxes may force Phil Mickelson into Retirement

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poor guy

http://www.forbes.com/sites/anthonynitti/2013/01/21/golfer-phil-mickelson-may-call-it-quits-due-to-climbing-tax-rates/

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.

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Posted · Report post

At least he can caress his own titties for comfort.

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gonna leave Cali,that is for sure

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I don't blame him for wanting to leave Cali.

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Posted · Report post

Retire due to tax increase. I wish.

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Posted · Report post

If he doesn't learn how to putt, this will all be moot.

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Posted · Report post

I love it when people like this throw public tantrums to try to get a point across

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Posted · Report post

Getting out of California makes sense. He pays them millions.

The increase in capital gains is there whether he retires or not.

He will lose out on a few more million due to the increase in the top bracket. If he doesn't enjoy golf anymore then retire with hundred's of millions.

But why would you retire because your net income goes from $30M to $25M (guessing) and you could offset that by moving to Florida.

I note that the article asks if he would move to Canada. That doesn't help anything as Americans pay federal tax regardless of where they live in the world.

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I hear Phil is switching his golf clubs for blues guitar and plans to tour the country singing about the hardships of life as a famous professional golfer

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So going into early retirement is a tantrum now?

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I don't blame him for being upset, I am as well.

However I don't do things like threaten to stop working, or quit my job though.

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I don't blame him for being upset, I am as well.

However I don't do things like threaten to stop working, or quit my job though.

Who is he threatening...he's self employed. Threaten to move? Yeah.

Careful...he'll shoot.

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