Phil Mickelson’s taxes were the subject of widespread incredulity this week after tax planner K. Sean Packard wrote a guest post for Forbes that calculated the multi-millionaire golf pro’s taxes on his British Open win.
Packard said that Mickelson has griped in the past about paying a 60 percent tax rate — and it seems that he’s actually telling the truth.
The US and the UK are unusual among nations in that they tax athletes on their winnings and endorsements even if they’re not residents of those countries. That means Phil Mickelson has to pay a hefty 44 percent United Kingdom tax on his Scottish Open and British Open wins — an estimated $954,000 bite out of the $2,167,500 in prize money.
And he must also pay an additional tax of around 45 percent on any endorsements earned in association with the wins or indeed with any of his play during the two weeks he spent in Scotland.
Of course he gets the tax credit to offset his US federal taxes. But the state of California still has its hands out for 13.3 percent of the winnings as well.
And there are a few more technical considerations that you can read in full in Packard’s story for Forbes.
The long and short of it is that, yes, it appears that Phil Mickelson’s taxes for the British Open and Scottish Open win have soared to 61 percent.
Despite his alleged witching and moaning, Phil Mickelson doesn’t seem to much care. I suspect that he knew what the tax deal was when he came to play in the first place.
And there are plenty of states with lower or even no tax that he could move to if he so desired for an immediate cut in his taxes, not to mention his living expenses.
Despite the rumors that he’ll pull up stakes, ESPN sports business reporter Darren Rovell suggested that they are just rumors.
— darren rovell (@darrenrovell) July 23, 2013
Phil Mickelson spokesman on residential future after tax quote: “He has no intention of leaving California.”
— darren rovell (@darrenrovell) July 24, 2013
When Phil Mickelson came from five strokes behind to take the British Open trophy away from Lee Westwood on Sunday, he claimed an amazing golfing victory at the age of 43.
As I reported at the time, a jubilant Mickelson knew that he was playing at the very top of his game. Some observers claimed it was one of the very best rounds of golf ever played on the course.
And Mickelson himself said, “It’s probably the greatest and most difficult win of my career. It is great to be part of any Open Championship and to win at Muirfield feels amazing.”
At 61 percent, Phil Mickelson’s taxes for the British Open win were stiff — but somehow I doubt he’s crying into his beer.