# Interesting Interview with Phil Mickelson



## Puck it (Jan 21, 2013)

I did not relaize that the PGA had an exception to their max yearly retirement contribution.

[h=1]Phil Mickelson pondering "drastic changes" pressed by tax burden[/h]
Submitted by Scott Michaux 
on Sun, 01/20/2013 - 7:23pm

By Scott Michaux


Byline2: 
Sports columnist








Let's just get this right out there as is via the transcript. Phil Mickelson makes some cryptic comments after his final round in the Humana Challenge, his debut for the 2013 season. It involves his tax bracket and he plans to discuss it more (maybe) next week before teeing off at Torrey Pines.

Here's the raw copy. Judge for yourself where he's going with this.

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.

Q.  Is that a correlation between that and what happened to the Padres?

PHIL MICKELSON:  Yeah.

Q.  With you?

PHIL MICKELSON:  Absolutely.

Q.  So why do you say next week?  What is going to happen so drastic next week?

PHIL MICKELSON:  No, but I'll probably be in the media center and I'll probably be a little more open to it because San Diego is where a lot more things, it's where I live, it's where the Padre thing was a possibility, and it's where my family is.  And it just seems like a better fit than right here off of 18 on Palm Springs.

Q.  Is it a stance that you are taking because on the one hand, you've made a lot of money, and no matter how much they take out, you are left with a lot of money?

PHIL MICKELSON:  Yeah.  I'll probably go into it more next year or next week.  But if you add up, if you add up all the federal and you look at the disability and the unemployment and the Social Security and the state, my tax rate's 62, 63 percent.  So I've got to make some decisions on what I'm going to do.

Q.  How do you balance that against the TOUR's retirement plan which by all standards is the best retirement plan in sports?

PHIL MICKELSON:  I don't understand.  What do you mean?

Q.  Well, I mean I understand the 60 percent part of the equation, but in the TOUR's plan, you guys put about as much money aside as you want.  It's treated differently under tax laws than most anybody else's tax plans.  Where most people can only put away $45,000 or $50,000, you guys can put as much away as you want.  And so at the end you guys end up with a much larger pot of gold than most people can.

PHIL MICKELSON:  But when it comes out, it's still taxed at the same 62 percent rate.

Q.  Well, you're still making that kind of money.  That's if you're still in that bracket.

PHIL MICKELSON: (No response.)


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## Warp Daddy (Jan 21, 2013)

Hard to feel sorry for a guy who is a multi millionaire as a result of playing a game . Àw cmon Phil your endorsements from the  BIG PHARMA industry alone are MORE than the average family will make in a lifetime !


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## Puck it (Jan 21, 2013)

Warp Daddy said:


> Hard to feel sorry for a guy who is a multi millionaire as a result of playing a game . Àw cmon Phil your endorsements from the BIG PHARMA industry alone are MORE than the average family will make in a lifetime !



Yes, but his taxable income is ~60% in CA.  The tax base is leaving, it was bad when I lived there and workied for Intel.  The CA tax rate was ~10%.  I think it is 13% or more now.  I do not know what the Padres thing is though.


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## Geoff (Jan 21, 2013)

Puck it said:


> Yes, but his taxable income is ~60% in CA.  The tax base is leaving, it was bad when I lived there and workied for Intel.  The CA tax rate was ~10%.  I think it is 13% or more now.  I do not know what the Padres thing is though.



I presume he tried to buy the baseball team, or a partnership in the baseball team, in San Diego.

He could always move to Florida where there is no state income tax and live next door to Tiger.  

He could still have a "vacation home" in California.


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## Geoff (Jan 21, 2013)

I'm trying to figure out how 62% could possibly happen.   Federal is 39.6%.   FICA caps at $113K so that's lost in the noise when you make $10 million+ per year.   He pays all of his Medicare so that's 2.9%.   That's 42.5% going to the federal government.   The new top bracket in California is 13.3%.   That gets you to 55.8%.   I'm sure he's able to shift big chunks of his income as capital gains at the 20% rate.   If he moved to Florida or Texas, his effective tax rate would likely be below 40%.


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## Puck it (Jan 21, 2013)

Could be the real estate tax too.


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## Geoff (Jan 21, 2013)

Puck it said:


> Could be the real estate tax too.



On a modest $7 million waterfront cottage in San Diego?   Impossible.


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## mattchuck2 (Jan 22, 2013)

Warp Daddy said:


> Hard to feel sorry for a guy who is a multi millionaire as a result of playing a game . Àw cmon Phil your endorsements from the  BIG PHARMA industry alone are MORE than the average family will make in a lifetime !



Agreed. 

I read today that he apologized for his comments. I don't really know what he apologized for. If that's the way he thinks, then he's free to say it. He probably got some backlash from people who make a lot less than he makes in interest on his millions  every year.


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## Puck it (Jan 22, 2013)

The point is that he thinks the ~60% share that he has to pay is too much. Would you think that way too if you made that much?


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## deadheadskier (Jan 22, 2013)

If I had a net worth of $180 million, I probably wouldn't care about really anything to do with money.


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## riverc0il (Jan 22, 2013)

deadheadskier said:


> If I had a net worth of $180 million, I probably wouldn't care about really anything to do with money.


I think that is easy to say but I think all people care about money. It has less to do with the exact number and more to do with the principle that you earned it. Honestly, I think any of us would be just as interested in retaining as much of it as we could regardless of how much or how little we make. There are people that are homeless and dirt poor looking up to those of us on this forum enjoying an expensive hobby scratching their heads. 

He is clearly exaggerating on his total tax liability. But if you don't like it, move to a state with less state tax or none at all. Federal tax... suck it up. All of our taxes went up on Jan 1.


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## deadheadskier (Jan 22, 2013)

You can't take money with you when you die.  If I was fortunate enough to amass that kind of wealth, I'd be more concerned about what ways I could use that wealth to make a difference in the world than how much my annual tax bill is.  You don't hear Warren Buffet and Bill Gates bitching about taxes........


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## riverc0il (Jan 22, 2013)

deadheadskier said:


> You can't take money with you when you die.  If I was fortunate enough to amass that kind of wealth, I'd be more concerned about what ways I could use that wealth to make a difference in the world than how much my annual tax bill is.  You don't hear Warren Buffet and Bill Gates bitching about taxes........


Two points... Gates and Buffet probably have mostly investment based income which gets taxed at a far lower rate than payroll taxes. Kudos to Buffet for saying "tax me more" and pointing out the issue that investment based income earners have some of the lowest tax responsibilities.

Second point... people with a lot of money may be concerned about it because they would rather give it to their family or to charity than to the government. Lots of well to do folks (such as Gates) have foundations that do good and I am DAMN SURE Bill Gates hires some very good lawyers to look after his money.

My point is that everyone of us attempts to preserve our wealth. I am sure you don't omit any deductions on your taxes just because you don't bitch. I'm fully behind progressive taxation and taxing the rich at a higher rate. But I don't think they are any different than the rest of us in doing whatever they can to reduce their tax burden in legal ways. 

P.M. does seem a little bitchy here. My only thought is why is he dishing to the press about his tax liabilities. His he expecting sympathy? I don't know, don't care. But I don't think it is fair to simply say "you're rich, you shouldn't complain" because people in ALL income brackets complain about taxes and try to reduce their liability.


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## Puck it (Jan 22, 2013)

Riv makes good points but you lost one thing that money that started the investment was theoretically all ready taxed a higher rate once.  Investment income is a big part of a lot of people's fixed income retirement like everyone's mutual funds and stocks.  Stocks are not just for rich people anymore.  The other thing is one always spends to income level, thus although 50% of something large is still large. There is a lot of money still going.  Also, do not forget that as income grows, deductions get reduced too.  

I have two kids in college and I get to deduct nothing for the tuition as I am above the threshold for the deduction( which I think is in 90k area). 

I would love to give to charities then to government.  It is money better spent and I get to pick where it goes as opposed to EBT cash benefit in here in MA.


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## drjeff (Jan 22, 2013)

I think the basic question in "fairness" in my mind at least is should ANYONE reguardless of their annual income and/or total networth be expected to pay more than an effective tax rate of 50%? 

I strongly feel that an individual SHOULD be able to keep atleast 1/2 of what his/her talents and the market for those talents allows them to earn! If not, you're eliminating what is an incentive for many to push themselves and help advance society! 

As for the whole investment income rates vs. the current progressive income tax rates. My thought has always been if someone is mad/jealous that someone else is paying a lower effective tax rate on a higher income, then they should demand that their congressional representation LOWER their rates to those of the investment income tax rates! Think about it!! Then those who are paying a higher effective rate get to keep more of what they earned (something their initial displeasure with the rate difference infers that they want)  while the others continue to pay their LEGAL tax rate and keep more of what THEY earned

As for Phil's comments- great for him to speak his mind! And my hunch is that after what California did to increase the income tax rates on their wealthiest citizens, that Phil will be far from the only Californian moving to some other state with lower/no personal income taxes for their primary residence and ultimately not see nearly as much/if not even a net decrease in tax revenues compared to what they were expecting in Sacramento

Taxes when it boils down to their most basic form is a question of "who's money is it?" Yours that you earned or the governments to take from you?


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## deadheadskier (Jan 22, 2013)

drjeff said:


> I strongly feel that an individual SHOULD be able to keep at least 1/2 of what his/her talents and the market for those talents allows them to earn! If not, you're eliminating what is an incentive for many to push themselves and help advance society!



You'll get no argument from me regarding that all income earners should be able to keep at least half of what they earn.  Even 50% seems like way too much for the government to take, so I can see why Phil might be feeling a bit robbed.  Again at a $180M nest egg, I personally wouldn't care much if I even earned another dime, but that's me, not Phil or anyone else.

Your second comment I hear many times and it's a load of crap IMO.  People deposit dollars in the bank, not percentages.  If your theory was true, there would've been very little advancement of society the entire last century.  There were obviously periods of scorching hot economies and massive technology advancements during that time and much of it occurred when the top bracket was well north of 50%.

http://www.ntu.org/tax-basics/history-of-federal-individual-1.html


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## Geoff (Jan 23, 2013)

Puck it said:


> Riv makes good points but you lost one thing that money that started the investment was theoretically all ready taxed a higher rate once.  Investment income is a big part of a lot of people's fixed income retirement like everyone's mutual funds and stocks.  Stocks are not just for rich people anymore.  The other thing is one always spends to income level, thus although 50% of something large is still large. There is a lot of money still going.  Also, do not forget that as income grows, deductions get reduced too.



The capital gains tax rate is an incredibly low 20% on rich people, not the 62% number Phil Mickelson made up while whining about taxes in California.   What's your point?


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## Geoff (Jan 23, 2013)

Puck it said:


> The point is that he thinks the ~60% share that he has to pay is too much. Would you think that way too if you made that much?



Mickelson is welcome to move to Mexico where there are lower tax rates and play on the Mexican golf tour.

He's a moron.   He could have simply kept his mouth shut, changed his legal residence to a condo in Florida to dodge the 13% California income tax bracket, and kept living in San Diego.   Since he shot his mouth off, he's either going to have to suck it up and pay the taxes to California or actually move since he's now on the radar screen of the California tax collectors.   There are a ton of Silicon Valley millionaires who have legal residence in Nevada and a "vacation home" in San Francisco.   When you're not making W-2 income, it's a pretty easy dodge and just about impossible to disprove.


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## Puck it (Jan 23, 2013)

I am sure his income is mostly W2 reported snce it is endorsements so he is not in the capital gains. That is my point.


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## Geoff (Jan 23, 2013)

Sports Illustrated says he makes about $60 million per year in endorsements and winnings.   He has an estimated net worth pushing $200 million.    Mitt Romney managed to show $14 million of capital gains income off of a similar net worth.   So yeah, Mickelson's income is mostly taxed as regular income.   Once he's paid the tax, that wealth then generates income that's taxed at a much lower rate.   You seemed to be claiming otherwise.


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## drjeff (Jan 23, 2013)

Geoff said:


> Sports Illustrated says he makes about $60 million per year in endorsements and winnings. He has an estimated net worth pushing $200 million. Mitt Romney managed to show $14 million of capital gains income off of a similar net worth. So yeah, Mickelson's income is mostly taxed as regular income. Once he's paid the tax, that wealth then generates income that's taxed at a much lower rate FOR NOW ATLEAST. You seemed to be claiming otherwise.



Fixed in for 'ya


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## Puck it (Jan 23, 2013)

What was I claiming? His regular income is taxed at the higher rate not his invesment income.  I am quite sure he has investment income too, who wouldn't with a net income like that.  BTW, capital gains is not just for rich people, there are quite a few regular folk taking advantage of it in their retiremnet years.  

I am just tired of people complaining that rich people don't pay enough.  Yes, a multimillionaire can afford to pay more but a well off wage earner is taking on the cheek with these comments.  This income bracket extends down someone making in the low six figure range. And 50% of that is alot less then his 50%.  

I am also tired of hearing people say that they would be happy paying that much if they made that much money.  I say "bull$hit"!!!!!!  

Okay, I am ranting now, especiallay after what I heard on the radio about Worcester Sttate adding a new fee, pedestrain access fee.  A f'ing fee to walk on campus!!!!!  When is this going to end.  Next stop Greece!!!!!


Just a little theory on increasing taxes on society.  See graph below. There comes a point were it does not help.


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## drjeff (Jan 23, 2013)

Puck it said:


> What was I claiming? His regular income is taxed at the higher rate not his invesment income. I am quite sure he has investment income too, who wouldn't with a net income like that. BTW, capital gains is not just for rich people, there are quite a few regular folk taking advantage of it in their retiremnet years.
> 
> I am just tired of people complaining that rich people don't pay enough. Yes, a multimillionaire can afford to pay more but a well off wage earner is taking on the cheek with these comments. This income bracket extends down someone making in the low six figure range. And 50% of that is alot less then his 50%.
> 
> ...



+1!!!

Everyone seems to enjoy bitching about what they'd feel like they'd do if it was their $$.  The problem is, it's not their money.  If the person making more is paying what they're legally required to pay, then great.

If one really want's to talk about "fairness" and taxes, then let's scrap the entire existing tax code (all however many million pages it's grown to) and either implement a flat tax or a VAT style consumption tax.  Otherwise all that's being talked about is "Robin Hood style" tactics


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## RootDKJ (Jan 23, 2013)

Income taxes are immoral.  Nobody but me and people I voluntarily designate should benefit from my labor.


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## mattchuck2 (Jan 23, 2013)

I'm pretty sure we're on the left side of the Laffer curve and have been for quite awhile. Tax rates, especially the rates on rich people, are at historic lows. The top bracket was 90% under Eisenhower and 70% under Reagan. People who complain about this are generally just Scrooge-like figures who love to hoard money, and think that they should be able to keep every penny they earn.

Problem is, the people who have the most money usually benefit most from the use of the commons. Take Phil, for instance. Every tournament he plays is protected by police. All of the fans who basically pay his salary get to the event on public roads. His sponsors can afford to pay him because they benefit from patents enforced by the government (in addition to any tax breaks those companies receive). When he flies all over the country, air traffic controllers keep his plane safe. Hell, at least one of the courses he plays (Bethpage) is straight up owned by the government.

People like to think that the government is just some money pit that you pay a bunch of money to and never get anything in return, but that's just not the case (which is the reason that nobody ever advocates specific spending cuts). The government is there to help people (regardless of what Reagan said), and a rich person like Phil gets a lot more help than someone living in the Bronx or Appalachia. It's only fair that he pays a little more in taxes.

[/politics]


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## Warp Daddy (Jan 23, 2013)

Blahblahblah, Phil gets paid hansomely for PLAYING A DAMN GAME !!! shaddup or go try  some other nation where u think u can do better !

Tax codes as Matt has claimed have actually been substantially lowered in favor of the extremely wealthy over the last 5 decades . 

Quit yer bitchin , the US is still the greatest country in the world and OUR individual largesse results notonlyfrom our own effortBUT more importantly from an accident of birth, being here in the US 


Pay up , shut up or move on to some other country .   

End of rant  , putting soapbox away and ducking for cover


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## Warp Daddy (Jan 23, 2013)

Blahblahblah, Phil gets paid hansomely for PLAYING A DAMN GAME !!! shaddup or go try  some other nation where u think u can do better !

Tax codes as Matt has claimed have actually been substantially lowered in favor of the extremely wealthy over the last 5 decades . 

Quit yer bitchin , the US is still the greatest country in the world and OUR individual largesse results notonlyfrom our own effortBUT more importantly from an accident of birth, being here in the US 


Pay up , shut up or move on to some other country .   

End of rant  , putting soapbox away and ducking for cover


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## drjeff (Jan 23, 2013)

Last year the federal government spent just over 29k per taxpaying household

Unless your household paid more than 29k in federal income taxes last year, your household was a liability to the federal government in terms of spending and you should be thanking folks like Phil Mickelson for paying far more to the federal treasury than the government spent on your household.  Basically, using this "fairshare" talking point that's popular amongst some viewpoints these days, he's paying in actual dollars far more than his fairshare.

Using Geoff's Sports Illustrated numbers of Phil's estimated annual earnings of 60,000,000 via endorsements and prize money, NOT investment income, he'd be looking at a tax bill outright of about 24,000,000 - now i'm going to guess that he's got some good accountants and financial planners, so lets say that they get his federal tax bill down to 12,000,000 (20%)- based on per capita household spending by the government, Phil is paying enough so that about 415 other households don't have to pay any federal income taxes.  One can argue all they want about the morality of paying one's fairshare and what exactly one's "fairshare" should be, but the facts are that unless a household is paying 29k in federal taxes right now, and there are millions that aren't these days, they are a financial liability right now.  And how many of these households will over their entire adult lifetime end up as a literal financial ability to the federal government vs. actually paying their "fairshare" interms of covering their costs to the government??

I say let Phil keep the money that he's legally entitled too.  Having seen and read about what him and his wife Amy do for many charitable foundations across the country, I'm guessing that those extra dollars will end up making a bigger impact when used by those charitable foundations than by the federal gov't


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## Puck it (Jan 23, 2013)

drjeff said:


> Last year the federal government spent just over 29k per taxpaying household
> 
> Unless your household paid more than 29k in federal income taxes last year, your household was a liability to the federal government in terms of spending and you should be thanking folks like Phil Mickelson for paying far more to the federal treasury than the government spent on your household.  Basically, using this "fairshare" talking point that's popular amongst some viewpoints these days, he's paying in actual dollars far more than his fairshare.
> 
> ...




+1


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## Puck it (Jan 23, 2013)

mattchuck2 said:


> I'm pretty sure we're on the left side of the Laffer curve and have been for quite awhile. Tax rates, especially the rates on rich people, are at historic lows. The top bracket was 90% under Eisenhower and 70% under Reagan. People who complain about this are generally just Scrooge-like figures who love to hoard money, and think that they should be able to keep every penny they earn.
> 
> Problem is, the people who have the most money usually benefit most from the use of the commons. Take Phil, for instance. Every tournament he plays is protected by police. All of the fans who basically pay his salary get to the event on public roads. His sponsors can afford to pay him because they benefit from patents enforced by the government (in addition to any tax breaks those companies receive). When he flies all over the country, air traffic controllers keep his plane safe. Hell, at least one of the courses he plays (Bethpage) is straight up owned by the government.
> 
> ...




I don't complain about paying taxes. It is how it is used by the entitlees.  Cut the f'ing budget just like we all have to do when our income goes down.  Take the friggin' credit card away from the gov't.


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## Puck it (Jan 23, 2013)

Warp Daddy said:


> Blahblahblah, Phil gets paid hansomely for PLAYING A DAMN GAME !!! shaddup or go try  some other nation where u think u can do better !
> 
> Tax codes as Matt has claimed have actually been substantially lowered in favor of the extremely wealthy over the last 5 decades .
> 
> ...



Careful, I will take you into the trees at Titus!


BTW, it is not the greastest country in the world anymore.  It used to be though.  My father would be ashamed if he were alive still.


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## RootDKJ (Jan 23, 2013)

mattchuck2 said:


> I'm pretty sure we're on the left side of the Laffer curve and have been for quite awhile. Tax rates, especially the rates on rich people, are at historic lows. The top bracket was 90% under Eisenhower and 70% under Reagan. People who complain about this are generally just Scrooge-like figures who love to hoard money, and *think that they should be able to keep every penny they earn*.


Exactly how much of what I earn should I be allowed to keep?


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## ctenidae (Jan 23, 2013)

Puck it said:


> I don't complain about paying taxes. It is how it is used by the entitlees.  Cut the f'ing budget just like we all have to do when our income goes down.  Take the friggin' credit card away from the gov't.



+1/2- there are a lot of things the government spends a lot of money on that I'd rather they didn't. Entitlements are a problem, but not all of them are bad.  I don't like paying taxes any more than anyone else, but I really don't like how they're spent a lot of the time.


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## AdironRider (Jan 23, 2013)

Can we stop arguing that the majority of his income is from capital gains. 

Dude made like 40+ million last year, top ten athlete in terms of income in the world, thats all taxed at the top federal rate, not capital gains. Were talking sponsorship deals, tourney wins, etc. Athletes arent exactly big rollers like hedge fund guys working on carried interest.  

Im sure some of it was taxed at that rate, but unlike Buffett, Romney, etc its a much smaller percentage, or effectively a drop in the bucket. 

And who cares that he makes money playing golf, or as the voice on the other end of a sex line, he earned the money. If playing a game was so easy wed all be Phil Mickelson. Any argument otherwise just reeks of jealousy.


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## JimG. (Jan 23, 2013)

We are treading a fine line of politics but we are all playing nice.

Just a reminder, carry on.


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## ScottySkis (Jan 23, 2013)

All I know is grandfather opened a pharmacy in the 60s in the Bronx, and gave a lot back to the community and his employees, now my boss who is rich gives nothing back and loves it. It is business but if you give back people are more productive, any good ones stay, no retirement pay for any one and most people in the office work 70 an average a week, not me just comparison.


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## Warp Daddy (Jan 23, 2013)

Ok mods i guess we ALL have to Agree to Disagree and thats OK with me cuz i KNOW im Right  :wink:


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## mattchuck2 (Jan 23, 2013)

RootDKJ said:


> Exactly how much of what I earn should I be allowed to keep?



The amount that's determined by tax rates set by the elected officials in your city/state/country. And if you don't like that amount, then you can vote in people that will set a lower rate.


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## ScottySkis (Jan 23, 2013)

mattchuck2 said:


> The amount that's determined by tax rates set by the elected officials in your city/state/country. And if you don't like that amount, then you can vote in people that will set a lower rate.



Okay I vote for Ron Paul but republicans stopped that from happening.


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## mattchuck2 (Jan 23, 2013)

Scotty said:


> Okay I vote for Ron Paul but republicans stopped that from happening.



Don't feel bad. Most of the people I vote for don't get elected either.


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## Puck it (Jan 23, 2013)

AdironRider said:


> Any argument otherwise just reeks of jealousy.



Spot on!


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## Geoff (Jan 23, 2013)

drjeff said:


> Using Geoff's Sports Illustrated numbers of Phil's estimated annual earnings of 60,000,000 via endorsements and prize money, NOT investment income, he'd be looking at a tax bill outright of about 24,000,000 - now i'm going to guess that he's got some good accountants and financial planners, so lets say that they get his federal tax bill down to 12,000,000 (20%)-



So Phil's clever accountants manage to hide $12 million of *our* money.

Geoff ducks and runs


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## drjeff (Jan 24, 2013)

Geoff said:


> So Phil's clever accountants manage to hide $12 million of *our* money.
> 
> Geoff ducks and runs



If it's a LEGAL "loophole" then it never was OUR money. That's how I look at it.

Whether or not one agrees with the "loophole" that's an entirely different discussion.  In the end, if someone's tax return can past the test of IRS scrutiny and not end up with them in trouble for violating some line or two in the millions of pages of the tax code, then I have absolutely no problem with that


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## Puck it (Jan 24, 2013)

drjeff said:


> If it's a LEGAL "loophole" then it never was OUR money. That's how I look at it.
> 
> Whether or not one agrees with the "loophole" that's an entirely different discussion. In the end, if someone's tax return can past the test of IRS scrutiny and not end up with them in trouble for violating some line or two in the millions of pages of the tax code, then I have absolutely no problem with that


  Loopholes (IMHO) are not illegal, it just means that you have a good accountant that knows the tax code and exploits it.  You also have to have the money.  For the normal W2 person, there is not much anymore even charitable contributions requirea receipt for even dropping money in the pot at a church.


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## Puck it (Jan 26, 2013)

Just thought of this in how he may have got to 60% number.  If he does endorsements and wins tournaments in other states. He will be taxed by that state to.  Correct?


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## deadheadskier (Jan 26, 2013)

Puck it said:


> Just thought of this in how he may have got to 60% number.  If he does endorsements and wins tournaments in other states. He will be taxed by that state to.  Correct?



No.  I looked it up as for years my brother in law lived in Maine, but worked in Mass.  This is what Turbo-tax had for information.



			
				Turbotax said:
			
		

> The normal rules for interstate taxation are -
> --- you file a non-resident return for the states where you worked but did not live, reporting only the income earned in that state.
> --- you file a resident return for the state you live in reporting all of your income, no matter where it was earned.  You claim on your home state resident return a credit for taxes paid to other states that you worked in.  If the out of state income was from a state without an income tax, you would have no credit.
> 
> The result of these rules is that you will pay tax on the income, but only once, and the net result is it will be at the tax rate in the higher tax state


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## Puck it (Jan 26, 2013)

deadheadskier said:


> No.  I looked it up as for years my brother in law lived in Maine, but worked in Mass.  This is what Turbo-tax had for information.
> 
> [/FONT][/COLOR]



I was a thought.  I also heard that CA gov't is considering an exit tax.  That is wrong.


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## Geoff (Jan 27, 2013)

deadheadskier said:


> No.  I looked it up as for years my brother in law lived in Maine, but worked in Mass.  This is what Turbo-tax had for information.



Yep.   In the case of Phil Mickelson, he'd pay state income tax in the state where he won the tournament filing a non-resident return and then owe California the difference between what he'd paid to the other state and California's higher rate.    

For the little people at lower income levels, nobody monitors it.   If I have a business trip to a high tax state, I'm technically supposed to file a non-resident return for those days I work there.   If you win a million bucks in a golf tournament, the state wants their cut.


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