After closing out the Humana Challenge, Phil Mickelson announced to the waiting press he needs to make some "drastic changes". It is not a health issue. It is not the demanding schedule of touring and the impact on his family.
The change is his tax liability. As many conservatives point out, the myth the Administration and Democrats have been selling that taxation on the wealthy is fair and necessary is coming home to roost. Since Mickelson is a long-time resident of California, he is suffering on all fronts. In last year's election, Californians (no doubt inspired by the President) voted a 29% increase on income over $ 1 million (Mickelson's state income tax rate is over 13%). Then, we reached the "fiscal cliff compromise" where Congress raised income on individuals earning over $400,000 and couples over $450,000. Mickelson can have no wins, and makes much more in endorsement fees. With the additional increases that went into effect, Mickelson reached an overall tax rate of 62-63%. He is also facing the additional costs of health care, in some form of tax or penalty. He pays nearly twice as much of what he earns to government as he takes home to his family.
The President sold the country on the notion people who earn $250,000 or more (his original request, and apparently it remains a goal in future negotiations) can afford to pay more, and treats the idea that success is a lottery. If you win, you were just lucky and deserve a large bill for services from the government. Unfortunately, there are "blue state" governments who also buy this idea and want to raise the tab, like California.
I took a course in management, taught by a man who immigrated to the United States from Sweden. He had been the president of an international pharmaceutical company there, and told the class his annual tax bill was always in the 90% bracket (on the very rich, they provide a bill based on the earnings and a formula to calculate the individual's bill). He also told of a nationally famous children's author (their version of JK Rowling) whose tax bill was calculated at 105%. This is why celebrities, rock stars and the wealthy move out of their home countries (Beatles and Rolling Stones left England, and most recently Gerard Depardieu threatened to leave France when their government considered a 75% tax rate on its rich.) This is also the system of taxation and government entitlement programs Obama and his party want to push the United States toward. As taxes rise, those who are truly wealthy relocate to places with more agreeable rates and opportunities. As the top tier filters off, the burdens continue to rise on the lower tiers.
I'd personally like to invite Mickelson to the beautiful state of Nebraska. Our state income tax rate is already low, and our governor is proposing eliminating it altogether. It could be a "win-win" situation for the state to draw an internationally known sports figure in the cause of tax fairness. We have good schools for his children. We have good golf courses. The US Senior Open and Cox Classic tournaments are well attended in Omaha.
Our state, while considering the elimination of the personal and corporate income tax, is going to raise the spending on state programs 4.9% over the next two years, and build up our rainy day fund that hedges against slower revenue years. I think Nebraska could be the drastic change Phil is looking for. Our state motto is "The Good Life" and I think that's what Mickelson wants for his family. I think most Americans want it for their families, too.
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