Mickelson takes mulligan on his tax comments

Jan 27, 2013 @ 12:01 am

By Bloomberg News

Phil Mickelson
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Phil Mickelson (Landov)

Phil Mickelson has apologized for saying that he would have to make “drastic changes” due to new U.S. and California tax laws.

The golf champion said that the comments should have remained private.

“Finances and taxes are a personal matter, and I should not have made my opinions on them public,” Mr. Mickelson, 42, a winner of four major golf titles, said in a statement last week. “I apologize to those I have upset or insulted, and assure you I intend to not let it happen again.”

Following his final round of the U.S. PGA Tour's Humana Challenge in La Quinta, Calif., on Jan. 20, Mr. Mickelson was asked to elaborate on his comments during a Jan. 14 conference call about the reduced schedule of another veteran U.S. golfer, Steve Stricker, 45.

“I'm not going to jump the gun, but there's going to be some drastic changes for me, because I happen to be in that zone that has been targeted federally and by the state,” Mr. Mickelson told reporters. “It doesn't work for me right now, so I'm going to have to make some changes.”

Mr. Stricker has said that he will play a limited schedule this season.

When asked if he would consider a similar plan, Mr. Mickelson said that he wasn't sure.

“I'm not exactly sure what I'm going to do yet,” he said after tying for 37th at Humana.

“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 is at 62% to 63%,” Mr. Mickelson said. “So I've got to make some decisions on what I'm going to do.”

MIXED REACTION

The comments, made the day before President Barack Obama was publicly sworn in for his second term as president, drew a mixed reaction from golf fans. Many of the more than 1,200 comments received on a GolfChannel.com article about his remarks were critical of his plan, while others said it would be “hard to blame” him if he wanted to move out of California.

California's Proposition 30, a recently passed sales and income tax law, raised state taxes on income over $1 million annually to 13.3%, from 10.3%, a 29.1% increase.

The top rate under new federal laws is 39.6% on taxable income above $450,000 for married couples, up from 35% in 2012. There also are higher rates on capital gains and dividends.

FLORIDA MOVE

Many professional athletes, including California-born Tiger Woods, live in Florida, where there is no state income tax. He holds the money-winning record for the PGA Tour, with $101 million in career purses.

“I moved out of here in "96 for that reason,” Mr. Woods said in a pre-tournament press conference prior to last week's U.S. PGA Tour event at Torrey Pines golf club in San Diego. “I understand what he was, I think, trying to say.”

Forbes magazine ranked Mr. Mickelson the seventh-highest-paid athlete last year, with $47.8 million in earnings, including $43 million in endorsements from sponsors such as Barclays PLC, Britain's second-largest bank, and the accounting firm KPMG LLP. He has won $67.7 million in prize money during his PGA Tour career.

In December, Mr. Mickelson withdrew his ownership interest in the San Diego Padres.

Asked after his final round at Humana if the new tax laws affected that decision, he said, “Yeah, absolutely.”

"INFORMED DECISIONS'

“Right now, I'm like many Americans who are trying to understand the new tax laws,” Mr. Mickelson said in the statement.

“I've been learning a lot over the last few months and talking with people who are trying to help me make intelligent and informed decisions. I certainly don't have a definitive plan at this time, but like everyone else, I want to make decisions that are best for my future and my family,” Mr. Mickelson said.

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