It’s getting so top golfers never play without a caddy and a tax attorney these days.
“What’s the lie, Mr. Shapiro?”
“I’d say that if you get it on the green and make par, you’re looking at a $3,500 loss due to the UK tax rates. I’d slice it into the ocean.”
As you know, Mickelson won both the Scottish Open and the Open Championship (British Open to us) over the past two weeks. Total winnings: $2,167,500 (£1,445,000).
But that’s where the good news pretty much ends, according to Forbes Magazine.
The United Kingdom, which has authority to set Scotland’s tax rate until 2016, graduates to a 40% tax rate when income hits £32,010 then 45% when it reaches £150,000. Mickelson will pay £636,069 ($954,000, or 44.02%) on his Scottish earnings.
But that’s not all. The UK will tax a portion of his endorsement income for the two weeks he was in Scotland. It will also tax any bonuses he receives for winning these tournaments as well as a portion of the ranking bonuses he will receive at the end of the year, all at 45%.
And now this fresh hell: If Mickelson stays a California resident (he says he’s moving due to the high tax rate, but so far hasn’t), his Scotland winnings will be taxed by that state as well. As of Nov. 2012, California’s tax rate for $1 million-plus-earners has gone up to 13.3 percent, from a prior top rate of 10.3 percent.
He’ll be arriving in the states on a fishing trawler any day now, where he will then hitchhike home. If you see him, please give him food.
— 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