Phil Mickelson Needed to Pay 61% in Taxes For His Fame

Phil Mickelson Needed to Pay 61% in Taxes For His Fame

“I might move away from California because of the State taxes here”, quoted Phil Mickelson and guess what? He became the hot topic this past January when he had to sacrifice 61% of his money he earned from of 2013 Open Championship and The Scottish Open in the shape of governments taxes. Steeped tax rates and UK’s policy to collect more taxes on endorsement earnings of non-resident athletes with the rest of the taxes from United States government, were the factors behind this dramatic situation.

Phil Mickelson, Open 2006
Phil Mickelson, Open 2006 (Photo credit: Wikipedia)

Mickelson actually need to pay the same percentage of taxes for both tournaments which doubled his pain. He earned about $ 2,167,500 from both events and his complete tax penalty from these earnings was $ 1,324,800. He would be taking only $ 842,700 along with him. That is discouraging for a successful athlete like him to earn lot of cash and then just let 61% of his earnings be in the buckets of government. This is definitely weird and stressing for him.

Now, everybody knows that governments collect all this money for progressive purposes and impose their strict tax policies upon the rich and other high level earners. But these are not the only reasons for Phil Mickelson having to pay the stepped up taxes. Britain’s strict tax policies for non-resident athletes are also being accused for all this drama. Furthermore, he also needs to pay United States federal taxes and California taxes that combined sum up to 13.3%. That is lot of money to pay for success.

What common people might be thinking about all this? Well their sympathies won’t be in favor of Phil Mickelson because general perception about the millionaires is that they are rich and they should be paying lot of money to the government so that it can be spent on the welfare of the people. The common view about them is that they are famous and rich already and will earn more than general people. But money can only be made by offering something that people want and is therefore inherently good.

Phil was recently ranked at number 7 in Forbes list that consisted of the highest earning athletes around the world but paying this heavy amount of taxes to the government(s) is really a tough thing to do for him. Phil Mickelson did not make any statement regarding this issue. He has to pay all these taxes and he can’t do anything regarding this but to wait until his next earning opportunity. One can imagine his condition right now. It is hard to give away most of your money in that way and without protesting either.

Tax Carnival Ecstasy – July 2, 2013

This image depicts the total tax revenue (not ...
This image depicts the total tax revenue (not adjusted for inflation) for the U.S. federal government from 1980 to 2009 compared to the amount of revenue coming from individual income taxes. The data comes from the Office of Management and Budget’s record of the ‘Budget of the US Government FY 2011’, specifically the ‘Historical Tables, Table 2.1.’ The information is also here. (Photo credit: Wikipedia)

Welcome to the July 2, 2013 edition of Tax Carnival Ecstasy. In this edition we start with an article from Bill Smith on completing your 2012 tax return for free if you have not already. John Schmoll writes about raiding a 401(k) to purchase property and how he would not do it. Keddon Carlisle has some lifetime tax planning software that looks quite interesting. Hope you enjoy all the material, like on Facebook, share, tweet, bookmark, and come back next time.

filing

Bill Smith presents Complete Your 2012 Tax Return For Free posted at 2012 Tax – Free Tax Filing Options, saying, “It’s time to prepare your 2012 tax return. But have you ever considered submitting your federal income tax return online?”

retirement

John Schmoll presents Things I Would Never Do: Raid My 401k to Buy Property posted at Frugal Rules, saying, “There is an increasing number of investors taking out loans on their 401k accounts in order to buy investment property. While diversification of investments is key, the inherent risk may not be enough to offset the potential gain. This is also not to mention the fact of the possible tax implications and loss of hard earned retirement savings.”

Keddon Carlisle presents Lifetime Tax Planning Software | Best Financial Planning Software | Retirement Planning Software posted at Best Personal Financial Planning Software, saying, “This lifetime tax projection software provides fully integrated IRA retirement calculator and 401k retirement calculator facilities automatically apply lifetime taxes related to your traditional IRA, 401k, 403b, 457, Simple, Keogh and other retirement accounts and to your Roth IRA and to your designated Roth 401k, Roth 403b, and Roth 457 account contributions.”

taxes

Bill Smith presents Filing Your Taxes At-Home – It’s Easier Than You Think posted at 2011 Taxes, saying, “Most customers aren’t aware of just how easy it is to learn how to do your own taxes online.”

Bill Smith presents TurboTax Makes Tax Season a Breeze posted at 2009 Taxes, saying, “Financial capability is a major part in an adult’s life. Finishing your degree and getting a job is needed in order to maintain a sustainable life, along with paying taxes.”

Bill Smith presents Filing Free 2012 Taxes Online: What You Need To Know posted at 2012 Taxes – Free Tax Filing Options, saying, “Are you interested in filing free 2012 taxes online? If so, you should know that TurboTax 2013 is the very best way to do it.”

Bill Smith presents Tax Return Extensions Made Easy posted at 2013 Taxes, saying, “Most people these days have such busy schedules and isn’t it a hassle to personally file our tax returns?”

That concludes this edition. Submit your blog article to the next edition of tax carnival ecstasy using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.