How Much Tax Should Phil Mickelson Pay?

About a year ago, Farrell Evans, a golf writer for ESPN.com, wrote a piece that was critical of Phil Mickelson’s notorious comment that high taxes were driving him out of California.  I was troubled by the ignorance and prejudice expressed by Mr. Evans, and here is a message I sent to him in response.  I have yet to hear back from Mr. Evans, so I guess he stands by his comments and it is OK for me to publish my response to them, which was as follows.

Dear Mr. Evans,

I guess your piece on Phil Mickelson’s taxes, in ESPN.com today, falls into the category of opinion, rather than reporting, but you have blurred the distinction.  Here are some representative excerpts from your article:

 “Mickelson claims his tax rate is upwards of 63 percent, but several accountants have contested that number. Still, he pays his fair share.”

 Comment:  regarding the first sentence, I think you need to hire a new set of accountants.  Try adding 39.5% (federal income tax), 13.3% (CA income tax), 3.8% (Medicare tax), and even a bare-minimum amount for state and local taxes on sales, hotels, car rentals, fuel (for his cars and his private plane) and you actually go above 63%, not below it.  As for whether 63%+  represents Phil’s “fair share,” how, exactly, are you defining his (or anyone’s) fair share of taxes?  If 63% for Phil is “fair,” how about 75%?  90%?  How much is fair for YOU – and how did you arrive at that figure?  Where is your dividing line?  Where did you get that answer – was it in a civics book?  The Bible?  What is your source?

 “High taxes aren’t going away and the rich like Mickelson are likely in the near future to pay a greater share than the poor and middle class.”

Comment: Let’s do a little basic math.  What’s the 2013 marginal federal income-tax rate on the top dollar of your income?  (I am guessing you think you are “middle class.”)  Assuming it was something less than Phil’s 39.5%, and that your state tax rate was something less than Phil’s 13.3%, isn’t Phil already paying a bigger share of his income than you do of yours?  And if Phil’s total income was $63 million and yours was, say, $250,000, isn’t Phil actually paying a WAY bigger “share” of the overall tax burden of the United States than you are?  I mean, whether you mean “share”  as percentage of personal income, or share of the total income of everyone, Phil is already paying way more than his “share” unless you are basing your conclusions on some kind of moral or religious philosophy that supposedly has a whole set of moral mandates relating to income-tax percentages.

 “Mickelson might have a very myopic view of his tax situation. . . .   No amount of taxes that he will pay over his lifetime is likely to threaten his standard of living.”

Comment:  Again, definitions, please.  How are you defining “Phil’s standard of living” – do you mean, What Farrell Evans thinks Phil Mickelson’s standard of living SHOULD be, in a just and moral world?  That must be it, because every additional dollar that Phil pays in taxes is a tax that reduces his standard of living by a dollar.  Maybe that was not what you meant; maybe you meant, Phil will always have a higher standard of living than you, net after taxes, unless you tax him at something in excess of 99% of his income ($62 million in taxes), and in your world, that means the standard of living TO WHICH HE SHOULD BE ENTITLED will not be threatened because he will still be taking home one million dollars which is still more than you.

 Putting aside all of these issues, I should also remind you that, in addition to your obvious feelings of animosity, envy, disgust, etc., for Phil, you reveal your ignorance of the fundamental economic issue involved here.  Phil, like you (and any other rational human being), is likely to take whatever steps he deems necessary to do the best possible job of conserving his savings so that he can do the best job of protecting and caring for his family and having enough left over to behave in a generous and charitable manner.  Phil is known to be an extraordinarily generous and giving man, and he pays a lot of taxes.  Waging class warfare against the Mickelsons of the world (and of California in particular) is likely to hurt lots and lots of people – you will drive them away from places like CA that need their tax money.  Phil is undoubtedly willing to pay a ton of CA taxes, but if you push too hard, you lose a lot.  If you could keep him in CA at a 10% income tax rate, is it really a smart thing to raise the rate to 13.3% and drive Phil out of CA?  That kind of thing is so counter-productive that it is just nuts, not rational behavior.  Maybe you will finally be satisfied when we are all economically equal – even if that means equally poor.

Michael E. C. Moss

 

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