140 thoughts on “Low 60s is a great golf score, but a terrible tax rate

    • Most people do mind paying taxes. That is why they try to avoid them as much as possible. And the fact is that if they refuse to pay they are treated exactly as criminals and can be sent to jail or killed by the authorities. Taxes are theft.

    • jon-

      i think you may have missed the boat on this one. (or i am somehow misunderstanding you)

      most people barely pay any taxes.

      those that do pay a lot of tax do mind.

      the high tax rates and the fact that the state was a fiscal mess and rates were clearly going to rise again were one of the reasons i left California.

      when you pay 13.7% to the state, 39% to the feds and then high sales tax and property tax believe me, you do mind. fica barely even registers as annoying relative to that, but there’s another 14k out the window every year for programs that will have failed before i can use them.

      • We are all waiting for you to post the supporting data and evidence regarding your 12 bagger claim at Manchester.

        For some hot shot hedge fund manager (Manchester), you sure spend an awful lot of time posting here. Nobody here seems to be remotely interested in what your are peddling. Are 12 baggers really that easy? A little more focus on your hedge fund business might permit 18-baggers. Does your phone ever wring? Ever?

        I would think that you would spend more time providing your performance documentation while rounding up an army of eager clients ready to pay you BIG fees. Or are you some kind of non-profit hedge fund?

        Somehow, this whole picture seems cockeyed and twisted.

        Still waiting for your results….

        • mac-

          wow.

          you really may be the dumbest guy here.

          you keep repeating the same lies, refusing to substantiate them (because you cannot) and refuse to take my very simple and easy advice on how to verify what i said.

          you are a liar, a loudmouth, and an idiot.

          you’ve proved it. you can stop now.

    • Gee, struck a nerve did I? :-P

      I guess I should explain. From my experience, the arguments against taxation are not against the tax itself, but rather the unfair nature of the tax.

      The idea behind a tax is to discourage a free-rider problem in the case of public goods (that is, good that are non-rival and non-excludable). Since everyone pays, there are no free-riders. In practice, this is not the case. The tax burden is borne by a very small minority of Americans. About 75% of US federal tax revenue is contributed by 25% of the population. That is pathetically unfair. On top of that, this same group of people are often accused of contributing nothing to society, as leeches, as oppressing the lower classes, and other silly things. It’s no wonder, then, that they seek tax havens. I think if there was a tax code that was fair and everyone bore it together, it would result in a lower tax rate for everyone and there would be less “off-shore” accounts.

      • The unfairness of the tax system is not even my chief complaint. I also think the absolute rate is too high. Since I can’t eat fairness and I don’t expect anyone to be fair anyway, I only care how much of my income must be handed over to the state on pain of imprisonment. I don’t really care if everyone else has to pay at the same rate.

        • One of my objections to income taxes is that it should be nobody’s business how much I make, what I invest in, or any of the other personal information that the State demands of us to satisfy itself that we are complying with its rules.

          My objection to property taxes is that it can’t be my property if I must pay rent to keep it.

          • Brotio

            One of my objections to income taxes is that it should be nobody’s business how much I make, what I invest in, or any of the other personal information that the State demands of us to satisfy itself that we are complying with its rules.

            Yeah, It’s not enough that the State steals your property, they insist on knowing how you came by it.

      • “About 75% of US federal tax revenue is contributed by 25% of the population. That is pathetically unfair.”

        People argue that there is no such thing as income inequality because people usually move up and down the income quintiles over time. Wouldn’t that “unfair” tax burden move along with them and be averaged out over a lifetime? Any unfair tax is therefore eliminated by the non-existence of any income inequality.

        Every time the income tax laws are “simplified,” the number of pages of tax codes increase. Politicians are in charge of tax collection, so you have to be careful what laws you wish for.

        • As usual, Walt, you keep me honest.

          What I mean is that, at any given period, the tax burden is borne by 25% of the population. When you are that 25%, it sucks and it is unfair.

          I am not arguing for any special kind of tax or “simplification” or anything like that. I would just like to see tax loopholes closed so that the burden is spread out.

          I also think that if everyone bore the burden together, there would be more resistance to wasteful government spending.

          All Phil is saying is “please do not mistreat us.” I am sympathetic to that. Taxes shouldn’t be used as punishment. They should be used to finance the vital functions of government. When taxes become a political weapon, then those who are punished will seek ways to avoid payment, whether it be moving money offshore, relocating, or just not filing taxes.

          • Jon: “When you are that 25%, it sucks and it is unfair.”

            It is unfair, but I don’t want to trade places with people who pay a negative tax rate by claiming the EITC. I am also not a soak-the-rich type. No one should ever pay an effective rate of over 50% of their income for combined federal, state, local, and FICA taxes. How far below that can be argued–and will be.

          • “No one should ever pay an effective rate of over 50% of their income for combined federal, state, local, and FICA taxes.” — Walt

            “I believe this government cannot endure permanently half-slave and half-free” — Abraham Lincoln

        • Walt: “People argue that there is no such thing as income inequality because people usually move up and down the income quintiles over time.”

          I don’t think that’s exactly what people argue, Walt. Certainly income inequality exists. And certainly some people do move up and down the income quintiles all the time. But some people make choices which prevent them from ever moving out of the bottom two quintiles.

          I think the argument made against “solving” income inequaltiy is that almost anyone can make the choices which would allow him to move through the income quintiles. So that income inequality is a matter of individual choices – not genetic endowments or socioeconomic class into which one was born.

      • Jon

        My complaint is that taxation is theft. I would prefer to choose which, if any, “services” I get that are currently forced on all of us by monopoly providers.

        I’m not comforted by the fact that some people are robbed of more or less of their property than I am, and I certainly understand their willingness to take drastic actions to reduce their losses.

    • I’m curious, Jon. Have you ever been taxed at a higher than 40% tax rate?

      I know that 40 years ago, when i was young and idealistic, I thought that people shouldn’t mind paying taxes. And then, over the next 20 years, I watched as my hard-earned income was taken from me and spent by those in power on …. nothing of value. In fact, my tax money was used to destroy economic value. It destroyed incentives for many who would otherwise have been forced to produce. It was doled out as favors to corporate cronies who would otherwise have been forced to innovate or seek efficiency. My tax money was used to hire bureaucrats who actually impeded my attempts to innovate and seek efficiency.

      Have you not observed how government uses tax money to destroy incentives and economic value, jon?

    • Moe,

      Tax policy and law in general should not be based on which group you are most sympathetic too – unless you’re itching for civil war.

      • “Tax policy and law in general should not be based on which group you are most sympathetic too – unless you’re itching for civil war.”

        Bring it.

        • If I took 60% of your income, would you feel you needed to shut your trap? After all, compared to the vast majority of the world, you’d still have it good. Who determines who “has it good”? Would you want someone else deciding that for you?

          • Nobody pays 60% of their income, unless they are a dimwit.

            Like Ritholtz says: get some financial advice and shelter your money. We’re a nation of whiners. It’s especially hard to listen to whiners who in all actuality have it pretty damn good.

            It wasn’t too many posts ago, we were comparing America’s “poor” to those abroad – and many here said the same thing: stop whining, you’ve got it good…

            This is different?

          • Because reducing your tax rate is cost-free, obviously, and the state snatching 50% instead of 60% of your income is fine with you?

          • moe-

            one thing to keep in mind.

            much of a golfer’s income is prize money.

            that money is all taxed at the marginal rate of the highest dollar.

            there’s no really way to shield it.

            if you pay 39.6% federal and 13.3% to the state, you’re really getting up there. i know you can deduct some fed from state, but you are getting into the 50′s there.

            add in fica and property and sales tax etc and you could wind up over 60. it’s possible. i agree he ought to plan better if he is paying that much, but if we call the number 50 instead of 60, does it really change the argument much?

          • “So, you don’t mind a 60% tax rate on your income then?’

            I’m not making his kind of money, so I’m not currently taxed at that rate and what does answering that question solve for?

            I’ll switch places with him right now – if that’s what you’re getting at.

            Also, I believe a decent financial planner, CFP, can get it it down a lot further than 50%.

            I don’t begrudge you feeling sorry for him, I just don’t.

          • He gets a lot of money from endorsements as well, Morganovich. That money is also subject to the full force of taxation. Some people around here seem to think that all income is easily shielded. It’s not.

            In the case of endorsements, he has some flexibility. He could take some of it in the form of comps (for airplanes, travel expenses, homes, vacations, cars) which are not subject to taxation. Anyone remember the 60′s & 70′s when the top marginal tax rates were astronomical and companies provided cars, vacations and a host of other goodies to its executives in lieu of money income?

          • I don’t feel sorry for him. I just understand him and, apparently unlike you, I think theft is immoral. And yeah, maybe we can agree that not all taxation is theft, but it certainly quickly becomes theft above a reasonably small portion of the fruits of your labour.

            You don’t make the same income, but you also don’t have his talent or work his grueling schedule or take the risk he takes and took to become a great golf player.

            It’s all very well and good to say you’ll switch places with him now that he’s rich. But the time to switch places with him isn’t now but when he was an unknown and he had no idea what he might one day become. Would you have switched places with him then? I’m guessing the answer is “no” because you cultivated an entirely different career.

            The probability of making it to his level in any sport is miniscule. The large prizes compensate for the risks that they take and the effort they put in – an effort too large and risk too great for most of us.

            So, it’s just laughable to declare that you’ll switch with someone who is already successful! Well, of course you would. Who would refuse such a windfall? But, for him, it’s not a windfall. He earned it.

          • Moe

            I don’t begrudge you feeling sorry for him, I just don’t.

            I don’t think anyone feels sorry for Mickelson, but that misses the point, which is that half of every dollar he earns is taken from him in taxes. that’s a legitimate complaint, and I think you and I and most people would complain about it.

            In addition the percentage taken from him has just been increased, something most of us would complain about, especially if we realized no additional benefit.

            If you don’t think Mickelson deserves to make so much money for what he does then you should just say so, but be prepared to explain why not.

            The people who pay him those huge sums are doing so willingly, and must feel they are getting more than that value in return or they wouldn’t do it.

          • “And yeah, maybe we can agree that not all taxation is theft …” — Methinks

            When you are singled out by the mob as successful, and subjected to their lust because they have the plurality of the vote – it’s theft. When James Bovard said that democracy had to be something more than “two wolves and sheep voting on what’s for dinner”, the current system is exactly what he was talking about. There is no right to private property under such a system. As Marx said, “Democracy is the road to socialism”.

        • No. Moe, you do not understand. Phil Mickelson worked his ass off to become the best at his profession. He’s “got it good” because he spent thousands and thousands of hours perfecting his craft. And he made the right choice in perfecting a craft for which millions of us are willing to pay loads of money for.

          Moe, do you believe that people should be rewarded for hard work and for making smart choices?

    • Not a very relevant link. Nearly all of Mickelson’s income comes as ordinary income (golf prize money, appearance fees and endorsements). So he has to pay both the top federal rate and the top rate in each state he earns income (most of which is probably CA). He could save 5 million in state income tax just by moving to FL for at 6 months/year.

    • Rithhotz is avoiding the issue. There is no justification for the huge rates that Phil has to pay and no need for ‘rich people’ to have to pay fees to people like Rithhotz so that they can keep what they earn.

      • Ritholtz is a very wealthy man himself. And the joke is that if Mickelson is being sponsored by KPMG, and he’s paying what he claims to be 60% (which I doubt) it makes the joke bigger.

        See: Romney.

        “”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,” Mickelson said.”

        No it isn’t. Plus Mickelson writes off his state taxes off his Federal, so there is barely a net increase there. I don’t blame him for not knowing how his taxes are done, as someone in that position probably hasn’t handled his own finances for years, but the statement shows how ignorant even the wealthy are on this subject.

        Not to mention the idiots in the Confederate Red States where the median income isn’t even close to 40K a year.

          • Oh, Maxie-poo! Whatever Macdaddy’s deficits might be, they pale in comparison to a guy who trots out his low income, tear-down house and high property taxes in an effort to assert superiority.

          • Heh! the truth hurts, eh Maxie?

            Since I have some extra time today, I’ll help you with the following innumerate statement:

            No it isn’t. Plus Mickelson writes off his state taxes off his Federal, so there is barely a net increase there.

            You (a CFA?) apparently don’t understand that the *amount* of one’s previous year’s state tax is deductible from this years *income* for federal tax calculations, so that taxes aren’t applied to amounts paid in taxes.

            Let’s do Michelson’s taxes: Let’s ignore deductions as we don’t know what they are. If you feel better about it, chose another amount for taxable income, but the calculation is the same.

            $48 million x 13.3% CA state tax = $6.4 million paid to CA.

            $48 million – $6.4 million = $41.6 million taxable income for fed.

            Notice that we deducted his state tax from his taxable federal *income* not from the *amount* of his federal tax.

            Hope that helps.

            Yes, you’re welcome.

        • “No it isn’t. Plus Mickelson writes off his state taxes off his Federal, so there is barely a net increase there.”

          You think his deductions are unlimited? Ever here of the AMT. I have 4 basic deductions (property tax, state income tax, mortgage interest and charitable contributions) and I get crushed by the AMT every year. I’m sure he has better accountants and lawyers than I do, but I bet the AMT hits him harder than me.

          Now, even if he could avoid the AMT, he still only saves 39.6% when he writes off his state taxes.

          You must either not pay taxes or do any tax work.

          • Another moron chimes in. If it was possible for Romney – who can probably buy and sell Mickelson a few times over- to get an effective 9% tax rate, don’t tell me he’s paying 60%.

            My feeds are going wild over this statement. I’m sure KPMG must be THRILLED with this!

          • Romney, Maxie-poo? Seriously? Are you really that stupid?

            Romney now pays a 15% tax rate because his income was all L/T cap gains and dividends (absurdly high as that money was already taxed as labour income, but that’s another argument). Mickelson’s is all prize money and endorsements fully exposed to the top marginal tax rates with no way to meaningfully reduce that rate.

            The only way for Mickelson to get close to Romney’s rate is to quit and live off his investments, dipshit.

      • You’re essentially a prisoner in these places you’re moving to.

        Among the popular spots: Australia, Norway, Singapore, Cayman Islands, Costa Rica, Guernsey and Antigua.

        There is one way to have your cake and eat it, too, Duggan said.

        “The US possessions in the Caribbean — St. Thomas, St. John and St. Croix — give a 90 percent tax credit to US citizens living there at least 183 days a year, resulting in an effective tax rate of just 3.5 percent, he said.”

        • there are lots of ways to have you cake and eat it too.

          very few countries tax global income.

          all you have to do is be european and keep your investments here and you will pay no tax as long as you do not actually live in the us more than about 110 days a year. (it’s actually a weighted 3 year avg)

          the US is the largest tax haven in the world.

          alternately, you can get citizenship in a place like st kitts that has no income tax but a passport that allows you to live and work in dozens of countries (including canada, austrailia, nz, and the UK).

          the us has one of the nastiest tax regimes around. the only other country that fully taxes global income is north korea. a canadian may face higher marginal rates on local income, but if they keep their savings in the US, they are not taxed on it.

          • Morganovich,

            The other country is not NK but Eritrea. We’re in great company. I don’t think NK citizens are allowed to live abroad. They’re barely allowed to live in NK.

          • Remind me how many aircraft carriers St. Kitts has in the Mediterranean.

            Why, Maxie? Are you looking to hitch a ride?

          • “That was me not Juandos, poor old dear Maxie.”

            I do apologize. The two of you are so uniform in your stupidity, it makes it easy to confuse you.

          • max-

            wow, what a scary mindset you have.

            1. i see st kitts not having aircraft carriers as a bonus, not a problem.

            2. “What a display of patriotism. You make your money from the country that spends trillions to defend free enterprise, democracy and capitalism, and then you leave it for some backwater to save on taxes in a country where most people don’t have enough to eat.

            I call that “looting.””

            and i call taking hundreds of thousands of dollars in money from me annually to spend on thinks that i attach negative value to the same thing.

            i hate paying for dumb wars, a bloated military, subsidies for all manner of businesses, a welfare state that creates dependence, a war on drugs that wastes money and destroys lives, and all manner of other liberty reducing programs and horrid wastes of money like the negative return on my SS payments.

            you are making an absolute straw man argument in assuming that 1. our government spends money well and 2. that even if i did, i ought to pay such a large share of the costs, neither of which is true.

            they guy paying nothing in tax gets more than i do. i will never use welfare or unemployment or get social security by the time i retire. i pay my own healthcare etc.

            if you and i go buy a burger, we both expect to pay the same and we call that fair.

            but somehow when we buy “government” you can pay more in a year than most pay in a lifetime and you are “not paying your fair share”.

            i call that abuse of power and tyranny of the majority.

            do i get more defense or special lanes on the highway or anyhting else vs the guy who pays nothing? nope. in fact, i use less government than he does.

            the US does nothing special to help my business. i could run it from anywhere. my money would be just as safe in dozens of countries.

            so what is it i OWE so much for?

            that just sounds like the greedy angling of the entitled to get something for nothing.

            you want looting, try having other people vote themselves YOUR money.

            THAT is looting.

            tyranny of the majority is still tyranny.

        • It’s not enough to live in the USVI to get the tax break. You have to start a business which employs at least 10 Islanders and that business must be accepted into the Islands’ EDC program.

        • You’re essentially a prisoner in these places you’re moving to“..

          Purely anecdotal here but people I know who’ve given up their passports (yeah, it initially shocked me) to become Costa Ricans have found that they can travel the world more now that the cost of living and the ‘new money‘ acquired due to tax savings has changed radically…

          • Wow. What a display of patriotism. You make your money from the country that spends trillions to defend free enterprise, democracy and capitalism, and then you leave it for some backwater to save on taxes in a country where most people don’t have enough to eat.

            I call that “looting.”

          • Maxie, it’s kind of funny how you consider anyone who refuses to be robbed by the armed thugs of the state to be looters but not the people who want to plunder the productive via the mechanisms of the state. What a confused little mind you have.

          • “Maxie, it’s kind of funny how you consider anyone who refuses to be robbed by the armed thugs of the state to be looters but not the people who want to plunder the productive via the mechanisms of the state. What a confused little mind you have.”

            Juandos, it’s just not that you’re lame. But RELIABLY so.

            You hate our government so much? Go ahead and move to whoever will take you. Just get lost.

  1. The taxpayers are exiting and are being replaced by big tax spenders

    No wonder why California enjoys its own “failure to launch.”

  2. Apparently, California is getting upset that what it views at its slaves are leaving the tax plantation and it’s considering an exit tax.

      • I know. I view this as another step in the enslavement of the American population by the various organs of government. The scary thing is that this slow motion closing of the border started only about 18 years ago and it’s getting harder and harder to leave.

      • @Morganavich, who writes:

        “i hate paying for dumb wars, a bloated military, subsidies for all manner of businesses, a welfare state that creates dependence, a war on drugs that wastes money and destroys lives, and all manner of other liberty reducing programs and horrid wastes of money like the negative return on my SS payments.”

        Oh I get it. So let’s devise a tax system where 100% of the electorate agrees on 100% of the expenditures they like.

        That’s not going to happen, and that’s why these rhetorical exercises of the participants here are so childish and unrealistic.

  3. I think Phil realizes that the takers are on a steady course upward in California. The tipping point has been reached.

    It will be interesting to see where he ends up residing. I will guess Arizona where the top state income tax rate is 4.5% vs. CA @ 13.3%.

    • purely anecdotal, but i had dinner with a couple realtor friends the other night and they said that since jan 1, the number of californians looking for homes here has skyrocketed.

      that prop 30 stunt was really obnoxious and people are angry. not only did it hike taxes, it did so retroactively to jan 1 2012, which is a pretty nasty thing to do in november.

      suddenly having your rate jacked up 3 percentage points dating back 11 months is no joke.

      the kind of state that will do that to you is just not one you want to trust.

      note that the 55% that voted for prop 30 would not have been enough of a majority to get it through the ca legislature.

      it was pure populist theft.

      why hang around and be a milchcow for that?

      • morgan, blue state voters in Washington state consistently reject a state income tax.

        Also, in November 2012, a state referendum was approved, that makes it a requirement for 2/3 approval in the legislature for any tax increase.

        The citizens of Washington state approved the legalization of marijuana and gay marriage, but increased taxes stops at their doorsteps.

        • Citizen

          California also has a supermajority requirement for tax increases in the legislature, but Prop 30 was enacted by referendum, requiring only a simple majority. the people voted directly to tax themselves more, bypassing the legislature entirely.

          Why, again, do we prefer representative government to direct democracy? Look no further than to this example for the answer.

          Prop 30 blatantly appealed to emotion. “It’s for schools, it’s for the children!”

          At least it helps the poor pay their fair share in additional sales tax.

          • Ron, WA state often tries to emulate CA. I’ll bet a Prop 30 type is tried very soon because slowing the increase in spending is what is called “cutting”, and that “hurts”.

          • It is my understanding that Prop 30 was a tax on “the rich”. If that is correct, then a simple majority voted to tax someone other than themselves.

          • ron-

            i’m not quite sure you have characterized that correctly.

            “the people voted directly to tax themselves more, bypassing the legislature entirely. ”

            55% of the people voted to tax the richest 20% or 30% more.

            that’s not quite the same thing.

            voting to say “let’s all pay more” is one thing, but 55% agreeing that someone else ought to pay more is a bit different.

            getting people to vote themselves cash from someone else’s pocket is pretty easy.

          • morganovich

            You are correct. I worded that poorly. I meant to point out that the CA Constitutional requirement of a legislative supermajority to increase taxes was easily brushed aside by a simple majority vote on a referendum to tax the rich.

            But hey, it was for the children. How could any decent person object? (/sarc)

          • Brotio

            It is my understanding that Prop 30 was a tax on “the rich”. If that is correct, then a simple majority voted to tax someone other than themselves.

            You are correct. I wasn’t clear.

      • You seem yo have a lot of time on your hands.

        We are still waiting for you to document and post your claimed 12-bagger track-record generated at Manchester.
        Why the big secret? Hmmmmm??

        Any time.

      • One, because we have a MARGINAL tax system. Two, the higher the tax Mr. Mickelson pays to the state, the more he can deduct off his Federal return. I also assume he pays property taxes, has a mortgage, and a lot of his investments get the 20% treatment as well. That brings the net tax down. His mention of “Social Security” is a joke too. I guess he doesn’t realize he stops paying it when he reaches just over $110,000? Since he takes in $48 million, I think we can take out the 15% he added in.

        There is practically no way in hell- unless he’s a total idiot or he has one for an advisor- that he pays “60%” of his income to government entities.

        • And you work in finance?

          It would be easy enough to figure it out for yourself using the income numbers provided and readily available tax tables. Give it a try.

          I presume your “marginal” comment was meant to point out that only $47.3 million of the $47.8 million Mickelson earned in 2012 was taxed at the highest marginal rates.

          • “And you work in finance?

            It would be easy enough to figure it out for yourself using the income numbers provided and readily available tax tables. Give it a try.”

            You people are the dumbest f**king people on earth, and you sit there thinking you’re the kings of economics and reason.

            He takes in $48 million- of course, he doesn’t deduct the use of private jets, expenses, travel, business costs, all of this taken off Line 1.

            Secondly, even if you added everything up with NO deductibility:

            39.6% top Federal rate
            7.5% Top State rate
            3.8% Medicare tax

            That’s 50.9%. Call me crazy, but I think this guy isn’t using a 1040-EZ with a Turbo Tax program. I think he itemizes- a LOT.

          • If you insist: You’re crazy.

            California’s top tax rate is 10.55% – a rate to which virtually every penny of Mickelson’s income is exposed.

            The 3.8% medicare tax rate does not apply because that’s applied only to investment income.

            The medicare tax that does apply is 0.9% which is tacked onto the 39.6% federal rate.

            The ad valorem tax Mickelson pays does not disappear. You don’t seem to know how deductibles work. They are not tax exemptions. In effect, the tax ends up costing him 0.594 x the assessed tax instead of the entire amount. To calculate his tax properly, you’d have to add that amount (and any deducted amount) to whatever he pays in federal taxes.

            Then, of course, you left out the local taxes.

            Any expenses incurred in the procurement of that income are not tax deductions any more than the cost of employees are deductions for a company. Any plane rides he takes will be deductible only if they are taken for business purposes and it’s likely that the plane rides are comped to him by his sponsors and don’t show up as income. In any case, private planes are not that expensive and wouldn’t represent more than a few hundred thousand dollars in any given year – maybe even as little as your compensation, Maxie. The expenses incurred to produce that income are undoubtedly tiny relative to the size of his income. Even so, incomes are usually quoted net of the expenses incurred to obtain them, so I’m going to assume this is the case for Mickelson.

            For a person making only $200K per year, deductions are important. For a person making millions, they are pretty much meaningless.

          • He takes in $48 million- of course, he doesn’t deduct the use of private jets, expenses, travel, business costs, all of this taken off Line 1.

            So it’s your claim that Mickelson is somehow able to deduct enough from his $48 million income to reduce his taxable below $450k, so that the top rates don’t apply? If that’s the case, why do you think his tax advisers are dumb? That sounds like damn fine work to me.

            Secondly, even if you added everything up with NO deductibility:

            39.6% top Federal rate
            7.5 13.3% Top State rate
            3.8% Medicare tax
            (probably some property tax as well)

            That’s 50.9 56.7 %.

            Call me crazy, but I think this guy isn’t using a 1040-EZ with a Turbo Tax program. I think he itemizes- a LOT.

            Yes. Like everyone else, he reduces his tax burden as much as possible.

            But do you think he is deducting enough to reduce his taxable income to something less than $450k, where lower rates would apply?

            We can use your numbers if you wish, as the exact percentage isn’t the point. The point is that Mickelson’s tax rate just went up, and he will be required to pay millions of dollars in additional taxes, for no additional benefit to himself. He isn’t likely to use million of dollars in additional government services.

            You must believe that those extra dollars will be put to better use by government than it would be by Mickelson if he were allowed to keep them.

            If you claim he doesn’t deserve to keep what he earns, then you need to explain why. Be careful not to damage your “I’m not envious” argument”.

        • Maxie,

          How can you still be such a dipshit at your age? That $48 Million is all income, so your stupid little LT cap gains rate (24%, not 20% for people earning way more than you, btw) is irrelevant. The Feds confiscate 41% of that (oh yeah, baby. The Obama Medicare tax increase is uncapped and in addition to his 2012 income tax increase). Layer on top of that all the state and local taxes he pays.

          I know you don’t know how rich folks live, but honey, when you buy mulit-million dollar homes, you don’t take a mortgage. Only the interest on the first million is deductible and you have to make a 50% or higher downpayment anyway. Not worth the hassle, particularly on an asset that is only a fraction of your net worth and the overwhelming majority carry no mortgage on their homes. Even if he did, his deductions are miniscule compared to his income. They hardly do a thing to reduce his tax rate. Virtually all of his income is exposed to the highest rate of confiscation.

          • “I know you don’t know how rich folks live, but honey, when you buy mulit-million dollar homes, you don’t take a mortgage. Only the interest on the first million is deductible and you have to make a 50% or higher downpayment anyway.”

            You need a new broker- and yes, at these rates, you take out the million dollars.

          • LOL, Maxie. It’s so cute when you, sitting in your little tear-down in the shadow of NYC, think you know something about buying luxury homes.

        • Besides, you are missing the more important point. Why should anyone be required to pay anywhere near $25 million or more in taxes? Would you claim that Mickelson gets that much in government services?

          If you are really that envious of Michelson’s high earnings, just say so. Don’t nibble around the edges by arguing about tax rates.

          Why would anyone think you’re envious? Maybe it’s the silly, class envy theme of that Ritholtz piece you referenced.

          • Oh, stop with the “envy” bullsh*t, will you? I’m not envious of anyone, and certainly not for their wealth.

            Good thing your way of thinking is done with.

          • Maxxed Stank,

            “Oh, stop with the “envy” bullsh*t, will you? I’m not envious of anyone, and certainly not for their wealth.”

            Well, if it’s not born out of envy, then what is it exactly that propels you to be such a jackass?

    • You sure have a lot of opinions for an unemployed CFA. And they all seem to be grounded in tapioca.

      Maybe that’s why you are unemployed.

      • CFA? Surely you misspoke. I hold that designation (that’s how we’re supposed to say it). Maxie couldn’t pass the first level of the CFA after a year of study. If he through sheer force and will made it to the third level, the derivatives wold slaughter him.

    • This is what they “figured out”: So the maximum Mickelson could pay in state and income taxes, payroll and other income-related taxes would be around 60 percent.

      Pretty close. To reduce his tax bill he would have take advantage of all the “tax loopholes” you leftards are so opposed to and even here these guys take liberties and use bad logic (but what else can you expect from people who can’t understand the difference between 7% and 7 percentage points?). For instance, these tax geniuses say he can lower his tax bill by giving to charity. Yes, he can lower the amount he forks over to the state by voluntarily taxing himself by 1-his tax rate more. Charity is not a tax exemption. The amount you give to charity is not subtracted from the amount the state confiscates from you. It lowers your taxable income. Big difference. Even though deductible, charity is a self-tax. Deducting it only reduces the amount of the tax.

        • Only partially, though. Charity doesn’t get all of it instead of the IRS. that would work like an exemption. Worse, deductions are maxed out at 50% of your income. I give to charity for reasons that have nothing to do with the IRS, but I would be able to give a little less if it wasn’t deductible. Frankly, If there were no income tax at all, I’d give at least the same percentage of my income to charity and I’d feel completely differently about those checks than the ones I write to the clowns in the Potomac Swamp.

    • Really? he said 62-63 percent and CNBC tries to gripe about him possibly fudging 2-3 percent? and then they reveal they could get it down to 50% with a little effort. DOES 50% NOT REGISTER as F’ING HIGH?????????????? Then they throw in some bogus 20 some percent number just in case people reading have their thumb up their ass and will think that he only pays 20%???? CNBC obviously pandering to envious idiots. Maybe they should have put some pics up of starving children in the article for some emotional brownie points.

      Your link SUCKS. I’ve written better articles in high school.

      • CNBC is the home of Rick Santelli, who is credited with launching the Tea Party movement with his famous anti-TARP rant.
        It’s also the home of Michelle Cabrera, who wrote a book explaining why the SEC should be done away with.
        It’s also the home of Joe Kernan, who wrote a book saying the auto bailouts were a bad thing, explaining that the loss of jobs to tens of thousands of OTHER fathers was something that was needed to nurture the wealth of the economy.

        I don’t CNBC is pushing the “envy” meme.

        I don’t think C

        • welp, that article you cited was pure crap. Its trying to pin something on those “jerks” that ride around in jets and dare to complain that they pay taxes. There is no other reason for writing that article in such a manner.

          NOTICE these crappy journalists always compare the tax percentages and never EVER finnish the equation and reveal just what that percentage computes to.

          Just a stab in the dark, using $50 million which seems to be the assumed income of Phil, Mickelson forks out $25 million +/- several million if that greedy bastard can get his measly tax rate down to that miniscule %50.

          WHAT A DICK, he only paid $25 million. And I’m about to file for 28k on my earned income for my taxes this year?

          GFY

          • And I cant even put the percent sign on the correct side of the number. What am I even doing here.

      • Gsatt,

        High school? Ha! I bet you were capable of better math and logic than what’s contained in that piece when you were in pre-school.

  4. Ron H.

    “We can use your numbers if you wish, as the exact percentage isn’t the point. The point is that Mickelson’s tax rate just went up, and he will be required to pay millions of dollars in additional taxes, for no additional benefit to himself. He isn’t likely to use million of dollars in additional government services.”

    Which is a stupid argument to make, because we don’t tax on that basis, never have, and couldn’t even do it if we tried.

    Mickelson can bitch all he wants. He’s still paying LESS than Reagan’s rates in his first term, and on a historical basis, he still at the low end.

    You people are pathological.

    • Mickelson was 11 years of age in 1981. I don’t think he paid any taxes under Reagan’s rates. This Mickelson guy really is a piece of work. Maybe you’re on to something

      • Hey man, as long as Maxie-poo is randomly picking dates in tax history, how about we go back to the 7% maximum rate imposed on the very top incomes following passage of the 16th Amendment? Proponents of the Amendment scoffed at any limitations to it because “taxes will never rise above 10%!!!”. Compared to that, our tax rates are historically high!

          • I haven’t been around as long as you, my prune, but I see no reason to stick to any era – unless, of course, your shaky knowledge of history goes back only as far as the post WWII era.

            Fine. Compared to Reagan’s rate reduction to a 28% top marginal tax rate, our tax rates are astronomical.

    • Which is a stupid argument to make, because we don’t tax on that basis, never have, and couldn’t even do it if we tried.

      No we are NOT taxed on the basis of what we get for our tax dollars. You now have one correct statement to your credit.

      And just what IS the reason for taking people’s earnings in the form of taxes? What do they get for their money? If Mickelson’s taxes went up several million dollars, what did he get for that money?

      Mickelson can bitch all he wants. He’s still paying LESS than Reagan’s rates in his first term, and on a historical basis, he still at the low end.

      Well he should be grateful for that, eh?

      You must be unaware that a high maximum tax rate and a high tax amount paid don’t necessary correlate.

      And you work in finance?

          • That’s because you’re not married to a man who insists on clean bills, unencumbered by other people’s germs, right off the press. He knows when the bank gets them in stock and has a standing order. The bank calls and informs us that his fresh, clean stacks of bills are set aside for him to pick up at his leisure.

            As his dutiful wife, I take it upon myself to make fun of him mercilessly.

          • As his dutiful wife, I take it upon myself to make fun of him mercilessly.

            Oh that’s funny. Good for you. He deserves it.

            However, as a complaint about a husband, that’s probably the least harmful transgression I’ve ever heard of. Things could be much worse – from what read at the checkout counter in my local grocery store.

          • Checkout counter? As I understand it, Alien husbands who are the love children of Oprah and an Orc of Mordor are the absolute worst. I have nothing to complain about.

          • Alien husbands who are the love children of Oprah and an Orc of Mordor are the absolute worst.

            That’s my understanding also. I’ve read that they send their WIVES to the bank for those newly printed bills. How cruel is that?

      • “And just what IS the reason for taking people’s earnings in the form of taxes? What do they get for their money? If Mickelson’s taxes went up several million dollars, what did he get for that money?”

        That’s not even a legitimate argument to make! You don’t “barter” your taxes with equivalent services, and you idiots act as if the government can run on nothing.

        Moroever, it expressed the idiotic idea that taxes can NEVER go up, for ANY reason, not war, not two wars, not reckless economic policies, nothing. You wanna dance, you gotta pay the band Sparky.

        This is the United States of America, the last superpower on Earth. That costs money to run. Too damned bad.

        • That’s not even a legitimate argument to make! You don’t “barter” your taxes with equivalent services, and you idiots act as if the government can run on nothing.

          You’ve missed the point as usual. Think about it for a moment. Why should people be taxed? What are they getting for the money that’s taken, and who should get to decide?

          Don’t worry if you can’t think of an answer. I suspect your narrow little mind won’t let you go there.

        • Oh, Maxie! I don’t think your masters in government can run on nothing. That’s why I want to give them nothing. Your masters are morons. Which is probably why you love them so much, Maxie. Like loves like.

          And, uh….yeah. Yeah, you do actually pay taxes in order to receive services that government falsely promises it can deliver better than private alternatives. Taxes are not a tribute. Why is it you don’t understand this at your age. Oh, that’s right! You barely pay any taxes!

        • That’s not even a legitimate argument to make! You don’t “barter” your taxes with equivalent services, and you idiots act as if the government can run on nothing.

          I see you didn’t understand the question. I suspect that Mikelson pays 1000x as much tax as you do, but I doubt that he gets 1000x as much government service. If not, why not?

          If you and Mikelson both go for a burger, why should his cost 1000x as much as yours? And if his taxes go up by more this year than you will pay in your entire life, why don’t you think he has a legitimate complaint?

          Be careful not to fall fall into an argument about Mikelson not deserving what he earns, I don’t think that’s relevant at this point.

          • If it understands the question, it’s not our Maxie Blank. Comprehension is how we spot the fakes, Ron!

          • If it understands the question, it’s not our Maxie Blank. Comprehension is how we spot the fakes, Ron!

            Of course you’re right. It’s an excellent test.

  5. Thiessen is on another thread calling for more interventions, while Pethokoukis is on another playing with his Laffer.

    Great site.

  6. Hmmm..why did he apologize then? Perhaps it was brought to his attention that most of his supporters consist of a tax bracket which are unable to understand how anyone can live off a mere 10-20 million annually. Horrible PR move hence the apology.

    • Moe

      I see those big numbers still trouble you, but you are most likely correct about the reason for the apology. Mikelson can’t allow himself a moment of irritation because there are always a dozen microphones in his face waiting for just such a slip.

      How would you view his success if he had worked his ass off to build up a company that earned $48 million/yr making golf clubs instead of producing Phil Mikelson? Would that meet with your approval?

      And, as to his tax burden, would you prefer that he spend his income as he chooses, creating jobs and wealth for many others just as a golf club manufacturer would do, or would you prefer that it be taken and spent by government?

    • Moe: He apologized because he is a brand and not a person to his managers who make a percentage of his earnings. His brand loses value when he says things some people might not approve of and who might not renew his endorsements. Phil Mickelson the person needs to make sure he does not make any comment that injures Phil Mickelson the brand.

      I find it strange that someone would buy a car (like a Buick) from a golfer just because he endorses it for big bucks. What does Tiger Woods really know about cars that an average person does not know? However, that’s how it goes for a gullible market and why Tiger needs to keep his pants zipped up, and Mickelson needs to keep his mouth zipped, too if they want to continue to rake in the big endorsement money.

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