A very interesting article appeared in the New York Times on Sunday about the current political environment from the point of view of Phil Mickelson, the very successful professional golfer. He believes the recent changes in the federal tax code, along with changes in California's tax rates are making it less attractive to be a professional golfer. This is a microcosm of what we may hear from successful Americans as the true impact of higher taxes sinks in.
Mickelson is not looking for sympathy. He is a World Golf Hall of Famer who has 40 PGA victories over his professional career, which began in 1992. During this time, he has had won more than $67 million in career earnings. Last year, Forbes magazine ranked him the seventh highest-paid athlete in the world with total earnings of $47.8 million — $43 million of which were from endorsements.
In December, Mickelson backed out of a group that acquired the San Diego Padres. This decision by Mickelson was in part based on California's Proposition 30, which imposed a 13.3% surcharge on income of more than $1 million.
Mickelson is being a bit obtuse in his comments and said that he would say more during the upcoming golf tournament in San Diego this week. But there was this quote: “If you add up all the federal and you look at the disability and the unemployment and the Social Security and state, my tax rate is 62%, 63%. So, I’ve got to make some decisions on what to do.”
What will he do? Stop golfing? Move to a tax haven outside of America?
Is this the beginning of a long line of decisions made by wealthy Americans to cut back, withdraw, or relocate? If so, it could have a huge impact on businesses and their inclination to grow and hire new employees, which is critical to future economic growth in America.