Wednesday, January 23, 2013

Hey Phil, It's Time To Get A New Accountant

On Monday, professional golfer Phil Mickelson complained about the taxes he was paying and said that if they didn't change some "drastic" action would need to be taken.  Of course his only course of action would appear to be to stop making so much money, and retire from golf.  But what he said was that he was paying 62% of his income in federal and state taxes, and that was just too much.

When I heard that number, my first thought was not "oh, poor Phil," but instead, there is someone who needs to hire a new accountant and tax attorney.  Even living in a high tax state like California, there is absolutely no way that Phil should be paying taxes that are that high.   Fifty years ago he might have been paying that much, but it's really hard to do today.

As we have seen from recent debates, there are very very few wealthy people paying anywhere close to that number.  I won't say that the number is zero, but it has to be very very small.  Having worked with some people with very large incomes, and seeing what they were writing off their taxes, or having their companies pay for, I know that is not the case.  So what is Phil's accountant doing?  Not much if you ask me and he should immediately find a new one.

Mickelson has since backed off his remarks and "apologized" for making them, because it turns out he's realized that people don't want to hear wealthy people complain about taxes.  According to Forbes, Mickelson is the second highest paid golfer behind Tiger Woods.  Last year he earned around $45 million dollars.  Even if he paid 62% in taxes, which I highly doubt, that still means he took home more than $17 million.  I know my heart bleeds for him, how about yours?

Of course what I would like Mickelson to address is the fact that he received his college education for free at Arizona State University, a  public school, and his father was trained for his career as a commercial pilot using tax payers money since he began as a naval aviator.  So, Phil, how exactly are those things paid for except through taxes?  Was it okay for others to pay for that for you, but you don't feel it's right to pay for that for others?

I know he won't ever answer those questions, so he should simply take my advice and change the team responsible for his money because it is clear that they have no idea what they are doing.

Update:  Some reporters actually decided to do their job and investigate this further, and found that at most Mickelson would pay 51% in taxes.  The first source I used also appears to have underestimated Mickelson's earnings.  According to this article he took in around $61 million, not $45.  So if these numbers are correct the least that he made last year was $29.8 million.  The poor man, how is he ever going to be able to feed his family?

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