I know what I would do.
Phil Mickelson is considering it. Last year Mickelson had a pretty good year: $3.7 million in earnings and – get ready – $57 million in endorsements, for a total income (mostly taxable) of $60.8 million. With the one-two punch of Obama and Brown (California’s hapless governor), Mickelson has done the math:
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’s 62, 63 percent. So I’ve got to make some decisions on what I’m going to do.
He’s saved his money. His net worth is estimated to be more than $150 million, and even considered buying a piece of the San Diego Padres, partly for the tax benefits.
He is slated to play in the Farmers Insurance Open tomorrow in San Diego, and has promised an announcement about his plans which could include moving out of California and retiring from the game altogether.
He’s not the only one. France’s famous – some say infamous – actor, Gerard Depardieu, moved to Russia to escape France’s high income tax rates. From an article in the Wall Street Journal the temptation of a 13% flat tax there was just too much for Depardieu whose high-profile exit is making waves, and causing the French government some anxiety. After all, they planned to receive additional revenues because of the higher taxes. It doesn’t matter that the real world of Depardieu and Mickelson doesn’t work that way. As the WSJ article pointed out, some 600 to 700 high-income earners are leaving France every year.
I wonder where Mickelson might move? Several options come to mind. Texas, for one, and Florida for another. Neither have a state income tax, and the U-Haul index shows people leaving California for these favored locales at an increasing rate. But I also wonder this: where do high-income earners move if every place has high tax rates on the wealthy? My guess is there is enough freedom left in the world where common sense, and low tax rates, still rule to provide Mickelson plenty of options.