RUSH: The sports media jihad against Phil Mickelson is continuing. To borrow a phrase from our president who said, "The future must not belong to those who slander paying high taxes," this article is a CNN story by Tami Luhby. I'm assuming it's a female here, T-a-m-i. The story starts out, "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 an idiot he is!
This reporterette is in a much better position to know what Mickelson's paying in taxes than he is. Who does he think he is, going public and talking about his tax rate? He doesn't even know what he's talking about! That's the point of the story. Tami Luhby of CNN knows. She claims in the story that Phil Mickelson's only paying about 53%, not 63%, and the reporter even claims that Mickelson is actually paying less than that, since millionaires pay an average around 26%.
She looked it up. So since there is an average tax rate of 26% that millionaires pay -- and, by the way, she's including people like Buffett and his secretary and Gates, who don't pay income taxes. Tami, I'm sure, doesn't know that; she's a little confused. But we'll cut her some slack. That, of course, ignores the fact that most millionaires pay a lower rate because they're not paying income taxes; they are paying capital gains taxes. But most of Mickelson's income is wages.
Mickelson is not a coupon clipper. Mickelson's earning what is called earned income, just like yours. His income is not being taxed at 15 or 20%. He added up his federal rate and his state rate, and then what happens to his rate in California with Proposition 30. He's self-employed. He's adding up what he pays for Medicare. People that are not self-employed don't understand: The Medicare tax is 3%, 3.4% on everything. Social Security, at least, stops at 115 grand.
Medicare tax is 3%, 3.4% on everything. Let's add it up. Mickelson pays 39.6% (say 40%) federal and 13.3% California. That's 53%. He's gonna have a 3% Medicare tax. That's 56%. Then there's gonna be the 0.9% surcharge on income because of Obamacare. That's 54%. Then there's the 3% for another ObamaTax that gets tacked on here, and then there is California taxes. For people at Mickelson's earning level, he doesn't get to deduct very much, including whatever his state income taxes are. So in the gross, before he starts factoring deductions...
Remember, as a 39.6% bracket guy, he doesn't have many. They've taken a lot of those away. So he's calculating, and he's up around 62% or 63%. But Tami Luhby at CNN says: No, no, he's not paying as much as he thinks. He's only paying 53%. They quote him. Tammy Luhby at CNN, quotes him from Yahoo Sports. Mickelson said, "If you add up all the federal and you look at the disability and the unemployment and the Social Security and the state," he may not even have added the Medicare tax in this, "my tax rate's 62, 63%.
"So I've got to make some decisions on what I'm going to do," and that's all it took. The sports media descended on this guy like buzzards and vultures, and Mickelson finally said (paraphrased), "Okay, okay, okay! I'll go apologize. It's insensitive. I'll apologize for just mentioning that I'm keeping 37cents of every dollar I earn." That's the way to look at it. Don't look at it that Mickelson is paying 63%. The way to put this in proper focus and context, ask yourself: If you keep 37 cents of every dollar you earn, are you gonna talk about it?
And then is the sports media gonna descend on you as some insensitive buffoon? The jihad against Phil Mickelson continues. But this reporterette here pretends that Mickelson was just talking about his income tax, even though he's quoted saying the opposite. That's how she gets to the 53%. She's not factoring in the other 'cause she doesn't know about it, because she gets a paycheck with all that withholding from CNN.
She doesn't know what self-employed people pay. She probably doesn't know that Mickelson files quarterly estimates. She probably doesn't even know what that is. Well, she may know. Hell, I don't want to assume what she doesn't know. But based on the story here, she's just looking at income tax and not adding anything else to it.