{"id":11874,"date":"2013-07-23T16:41:13","date_gmt":"2013-07-23T16:41:13","guid":{"rendered":""},"modified":"2013-07-23T16:41:13","modified_gmt":"2013-07-23T16:41:13","slug":"taxes_take_bite_out_of_mickelson_s_wins","status":"publish","type":"post","link":"https:\/\/www.rushlimbaugh.com\/daily\/2013\/07\/23\/taxes_take_bite_out_of_mickelson_s_wins\/","title":{"rendered":"Taxes Take Bite Out of Mickelson\u2019s Wins"},"content":{"rendered":"

\"Listen<\/a><\/p>\n

RUSH: Phil Mickelson, as you know, won the Open Championship, which is the official name of the British Open. It was a come-from-behind win. He shot 66 on Sunday. Forbes magazine has a story detailing how much of his winnings he will pay in taxes, and the rate is 61%. “Phil Mickelson caught some heat this past January when he complained about his supposed 60% tax rate,” living in California. “I even had a little fun at his expense.”<\/p>\n

By the way, “This is a guest post from K. Sean Packard, CPA, who is Director of Tax at OFS. He specializes in tax planning and the preparation of tax returns for pro athletes.” And he has this guest post at Forbes. And he admits, “I even had a little fun at his expense,” because you know, when the rich start complaining about their tax rate there\u2019s no sympathy for them, and the rich normally don\u2019t do it. The rich normally don\u2019t complain. They just fix it while the poor aren\u2019t looking.<\/p>\n

Hee-hee-hee-hee-hee. And, of course, according to the left, how do the rich fix it? They just make it up by taking money from the poor. That\u2019s how the rich get rich. They steal it from the poor. The mathematics on that has never made sense to me, but that\u2019s what the left claims. So, anyway, the fact that Mickelson was even speculating about it, that caused everybody to say, “You don\u2019t do that, Phil! You\u2019re a rich guy. You\u2019re a champion.<\/p>\n

<\/a><\/p>\n

“You don\u2019t complain about your tax rate. You\u2019re supposed to act grateful and eager and willing to pay that rate. You certainly don\u2019t complain about it.” So people did dump on him and have “a little fun at his expense,” and one of them was this K. Sean Packard, CPA, who posted at Forbes. Then he writes, “But it appears that sponsor KPMG,” which is one of Mickelson\u2019s sponsors, “may have taught [Mickelson] a little more about taxes than we professionals have given him credit for knowing.<\/p>\n

“Mickelson capped a dominant fortnight in Scotland by shooting a final round 66 to come from behind and win the Open Championship. He also won the Scottish Open the previous week. For his two weeks of play, the [Mickelson] earned … about $2,167,500,” winning those two championships back-to-back. The United Kingdom, which has authority to set Scotland\u00c2\u2019s tax rate until 2016, graduates to a 40% tax rate when income hits \u00c2\u00a332,010 then 45% when it reaches \u00c2\u00a3150,000.<\/p>\n

“Mickelson will pay \u00c2\u00a3636,069 ($954,000, or 44.02%) on his Scottish earnings. But that\u00c2\u2019s not all. The UK will tax a portion of his endorsement income for the two weeks he was in Scotland.” This is the way New York gets me and why I don\u2019t go there. What Scotland is gonna do, is the UK will tax whatever KPMG pays Mickelson a year in a sponsorship. Let\u2019s say they… I\u2019m just going to pick a number. I don\u2019t know what it is, but let\u2019s say they pay him 10 million bucks a year. <\/p>\n

Scotland is gonna figure out what that would be if it was paid out every two weeks and take that, since he was working in Scotland those two weeks, and because of the work he does, he generated that endorsement fee, and so they\u2019re gonna get their take of it. That\u2019s what New York does, particularly if you once lived in New York and then leave. If you go back and work a day or 10 days and New York finds out about it, they tax you on the number of days that you work in New York at their rate, based on your annual income, and that determines what your tax rate there is, which is why I don\u2019t go there anymore. <\/line><\/p>\n

But I still get audited every year \u2019cause every year I tell \u2019em, “I didn\u2019t show up,” and every year they make me prove it 14 different ways.<\/p>\n

I\u2019m still in the middle of a nine-month audit for the last three years, and I haven\u2019t been to New York. But they automatically assume you\u2019re lying and make you prove it. See, this is what\u2019s getting Mickelson. In addition to all this, the UK “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%. It is a significant amount for Mickelson, with only Roger Federer and Tiger Woods earning more among athletes from endorsements and appearances.<\/p>\n

“Mickelson ranked No. 7 overall with $48.7 million in Forbes\u2019 June list of the world\u00c2\u2019s highest-paid athletes. The UK is one of few countries that collects taxes on endorsement income for non-resident athletes that compete in Britain (the US also does),” and New York. Whenever a visiting sports team goes into New York — Dodgers in New York — players pay taxes for the three days they\u2019re in town, and then they get \u2019em exempted for those three days in California. It\u2019s a mess. It\u2019s why you need attorneys. <\/p>\n

Anyway, all this added to his US income, and he is going to pay about 61% of his $2 million in earnings in taxes.<\/p>\n

BREAK TRANSCRIPT<\/p>\n

RUSH: Okay. So I want to wrap this Mickelson thing up. I don\u2019t want anybody to misunderstand. That 44% is the grand total of what the UK will take from Mickelson for his earnings because his earnings occurred on their soil. He will pay $288,000 in taxes to the state of California because he is a resident there. If he lived in Florida, he would not owe that $288,000, or if he lived in Texas, or if he lived (I think) in Kentucky, he would not owe those taxes. <\/p>\n

<\/a><\/p>\n

And then there are credits that he can take, a foreign tax credit on his US return so he\u2019s not double taxed at the federal level on this income. The bad news is that the credit does not cover self-employment taxes. When you\u2019re self-employed, you pay all of your FICA. There\u2019s no employer paying half of it. You pay it all. That\u2019s 2.9% of everything he earns. And then the Medicare surtax is another 1%. So all told, Mickelson is paying nearly a million dollars to the Brits, $300,000 to California, and the balance of it to the Feds for a total of 61%. <\/p>\n

He\u2019s gonna keep 39% of what he earned in the last two weeks.<\/p>\n

BREAK TRANSCRIPT<\/p>\n

RUSH: I tell you what I think. I think they ought to name this new little prince in the UK Phil, or Philip, kill two birds with one stone. You got Prince Philip, who is of course the lackey — ahem — the husband of the Queen, and then you have Mickelson, who single-handedly is propping up the royal family\u2019s living expenses for two weeks at a time over there. So it would be a great thing to name his new baby Phil. Can anybody explain something to me, folks? Why is it that American liberals are so fascinated, two things here. A, the birth of a baby<\/a>. You know, that normally is something that\u2019s a problem for them. <\/p>\n

Number two, this one\u2019s born into obscene wealth, and the liberals in the US media are going gaga over this. They don\u2019t care about birth, at least not much. And birth of a baby born into wealth? I mean, this is the kind of stuff over here they claim to despise. Well, I take it back. This is the royal family. That means they are elites. It would be like a birth in the Kennedy family, I guess, which would be cool to them, too.<\/p>\n","protected":false},"excerpt":{"rendered":"

RUSH: Phil Mickelson, as you know, won the Open Championship, which is the official name of the British Open. It was a come-from-behind win. He shot 66 on Sunday. 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