Life’s Only Certainties:Death And Taxes

Phil Mickelson at the 2013 Phoenix Open

Phil Mickelson recently won his first PGA Tour event of the year and 41st of his career at the Phoenix Open. Playing in front his adoring Phoenix fans, Mickelson lead from start to finish in almost historic fashion. After missing a birdie putt for a first-round 59, Phil kept the field and rowdy fans at the par-3 16th at bay for the next three days. His reward for first place, a $1.1 million check.

Mickelson made headlines as the PGA Tour began when he complained about the taxes he pays as a resident of California.

“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,” he was quoted as saying in Yahoo Sports. “So I’ve got to make some decisions on what I’m going to do.”

Mickelson was immediately criticized for criticizing the way he was taxed by the federal and state government. People couldn’t believe that someone who Sports Illustrated estimates makes $61 million-a-year could complain about anything.

Mickelson would probably look good to some NFL general managers and coaches after the way he backpedaled on those comments.

“I love this state, and I am certainly concerned for it,” Mickelson told reporters in a press conference before the Famers Insurance Open. “My apology is for talking about it publicly, because I shouldn’t take advantage of the forum that I have as a professional golfer to try to ignite change over these issues.”

But was what Mickelson said really wrong?

While Yahoo Finance estimates that Mickelson’s tax rate is closer to 51%, does giving up only half of what he makes, instead of almost two-thirds, make it any better?

As fans we often lack empathy for professional athletes when it comes to finances, especially when you hear stories like Latrell Sprewell. Sprewell once turned down a three-year $21 million contract because, “I have a family to feed .”

Even if Michelson is taxed at the 62% rate he estimates, he would still make more than $20 million this year.

Still lacking empathy?

Imagine that you make the average household income for the United States in 2012, $51,413. Then Zacchaeus, the tax collector (Yes, thats a Bible reference.), shows up and you’re left with $19,537. That’s what a 62%  tax rate looks like. Say Zacchaeus goes easy on you and only taxes you at 51%, that leaves you at $25,193.

How would you feel? Might you think about voicing your displeasure? Would you think about possibly moving to a new state where you could keep more of the money you earned?

While you may still lack empathy for Mickelson, he was well within his rights to voice his displeasure over the way he is taxed. No one should be happy giving away over half of what they make.

After paying taxes and his caddie Mickelson will keep an estimated 37 percent of the $1,116,000 he won on Sunday. Phil Mickelson will likely be able to keep only $410,000 of the $1.1 million he earned in his win at the Phoenix Open according to CBSSports.com.

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