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CNN: Mickelson Is Lying About His High Taxes

From CNN’s Money.Com:

CNN caption: Phil Mickelson doesn’t pay as much taxes as he thinks.

The truth behind Mickelson’s taxes

By Tami Luhby | January 24, 2013

NEW YORK (CNNMoney) — There’s no doubt that Phil Mickelson pays a lot in income taxes as a California resident, but it’s not as much as he thinks.

What a buffoon Mickelson must be.

The champion golfer said this week he might have to move out of the Golden State because of recent hikes in federal and state taxes on the wealthy.

"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," he was quoted as saying in Yahoo Sports. "So I’ve got to make some decisions on what I’m going to do." …

Notice that Mickelson was not just talking about his income tax. A detail this ‘reporter’ carefully ignores throughout this entire article.

Mickelson’s tax rate, however, is lower, according to the Tax Foundation and California tax experts. His winnings and endorsements, which Sports Illustrated pegged at nearly $61 million in its most recent annual estimate, subject him to the highest marginal rates for married couples. Here’s what they consist of:

— A 39.6% top federal tax rate, up from 35%, on income above $450,000, thanks to the fiscal cliff deal passed by Congress on New Year’s Day.
— A 12.3% top state tax rate, up from 9.3%, on income above $1 million.
— A 1% state mental health surcharge levied on incomes above $1 million.
— A 3.8% Medicare tax rate, which includes a new 0.9% Medicare surcharge on earnings above $250,000…

Overall, it leaves Mickelson with a top rate of less than 53%.

So where did he get the higher figure? It may be that he’s adding in Social Security, disability and unemployment taxes. But those are levied only on a relatively tiny portion of his income and don’t factor into his marginal tax rate.

They are still taxes.

Mickelson would have to fork over 15.3% in payroll taxes on the first $113,700. And if he’s self-incorporated, he may pay an additional:

–1% of the first $100,800 in state disability insurance taxes.
— Up to 6.2% of the first $7,000 for state unemployment taxes.
— 1.2% in federal unemployment taxes.
— 0.1% in state employment training taxes.

Regardless of Mickelson’s top rates, his actual income tax bill isn’t anywhere near one-half of his income.

A 53% tax rate isn’t near one half of his income? Besides, as we noted, Mickelson didn’t say he was just talking about his income tax.

In fact, there is a chance that Mr. Mickelson might also pay a pretty large property tax. (Not to mention a thousand other smaller taxes.) For instance, Mickelson’s house in Rancho Santa Fe, CA, is currently on the market for $7,095,000. And he may own other residences.

The rule of thumb for Orange County is that the annual property tax is around 2% of the purchase price.

While it’s hard to tell what the golfer really pays without seeing his tax returns, millionaires pay roughly 26% of their income in federal taxes, on average, according to William McBride, chief economist at the Tax Foundation.

What a bogus comparison. Most "millionaires" like Warren Buffet pay a lower rate because of their passive investments. Most of Mr. Mickelson’s income is not being taxed at the (previous) 15% capital gains rate.

This doesn’t take into account other taxes, such as property levies.

Oh, now she mentions property taxes. And only to ignore them. What a laugh.

This article was posted by Steve on Friday, January 25th, 2013. Comments are currently closed.

3 Responses to “CNN: Mickelson Is Lying About His High Taxes”

  1. Petronius says:

    “it leaves Mickelson with a top rate of less than 53%.”

    Medieval serfs only had to pay 25% or three days work per week.

    An Arkansas sharecropper paid about 25% and never more than 50%.

  2. mr_bill says:

    Phil’s “53% tax rate….isn’t anywhere near one-half of his income.” The “jornalists” have summarily discarded reality in pursuit of their agenda…or they’re as smart as a sack of wet hammers.

  3. Astravogel says:

    I guess you’re crazy to report an income exceeding $1 million
    dollars, so that explains the ”mental health surcharge?”

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