Phil Mickelson's tax rate: 61%
The golfer comes away from his victories in Scotland with a high bill from the UK.
But Mickelson now finds himself in that very situation, thanks to the United Kingdom.
Mickelson has been on fire lately, winning the 2013 Open Championship and the Scottish Open. But he doesn't get to collect his $2,167,500 in combined winnings and go home. Instead, there are U.K. taxes to contend with.
Both matches were held in Scotland, where the U.K. has set a 45% tax rate on income of more than $230,325. As a result, Michelson will pay about $954,000, or 44% of his earnings there. That's according to a writeup in Forbes by K. Sean Packard, an accountant who specializes in tax issues for professional athletes.
There's more. The U.K. also collects taxes on endorsement money for non-resident athletes that compete there. So it will get a cut of Mickelson's endorsement income made during his two weeks in Scotland as well as some of the bonuses he gets for tournament wins or for ranking at the end of the year.
Packard says that the U.S. will not double-tax Mickelson's income at least. But California will, since it doesn't have a foreign tax credit.
So in the end, before expenses are factored in that may reduce his tax burden, Mickelson is set to pay a bit more than 61% on his winnings, Packard writes. He might come up with enough expenses, such as his 10% caddy fee, to bring his rate down to 30%.
The U.K.'s tax rules are onerous enough that some athletes avoid the country when they can, Packard writes. Track's Usain Bolt stays away, and Spain's Rafael Nadal ditched a tennis contest at London's Queen's Club and instead signed with a rival tournament in Germany.
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I think that was about the tax rate here before Reagan was able to cut it. Who wants to work hard in order to have 60% of that income taken from them in the form of taxes? It's bloody criminal!
Phil makes his money on his own efforts........not on the backs of others.
One of the 'good' rich.
Phil is 42 years old. He didn't just work for 2 weeks for that money. He has worked for years. How many hours, days, months and years of practice did he have as a kid, then college student then adult to get his skills to the level that he can make this money - with no guarantee that he will get the skills dispite the practice? How many years was he known as the nicest guy not to have won a major?
In general, the way other entity tax credits work is that the entity where you work taxes your income (ie: Connecticut) and you pay your taxes there first. Then the place where you live determines how much the taxes would have been if earned in your home state (ie: New York). If where you live has a higher tax rate then where you earned the income then you generally pay the difference to your home state.
All we here from the liberals is about how much more gas is than here the only reason is taxes. Just think they pay45% taxes then pay all of that gas tax to go along with there worthless health care and you wonder why no one with money wants to live in europe
None of us would mind winning $2 million and of course the rich can afford paying higher taxes, but to have to give away over half the winning in tax and endorsements is insane! I wouldn't play in Scotland either.
For the tax collectors for getting so much and not even swinging a club. They are a rip off. If all of the athletes were to boycott England for playing until they come up with something fair and not ridiculous like it is now. Congrats Phil on a good win. I guess the Royals need the extra dough so they can waste it on clothing or candy and of course baby stuff. It is past time that the royals float their own boat and get a job and quit living off the people. Here in America we the people are almost gone into the poop pipe but are still not having that high of taxes(yet) When everything starts going up even higher I can hear those democrats that voted for this spendthrift that's knocking this country down. It is very evident that this country broke away from England. England will find out that for them to screw tourist that they will not come back. It does hurt their country but where greed is.
Prez Obuma and Gov Brownie love Phil .....they love him all the way to the Bank!
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[BRIEFING.COM] The S&P 500 trades lower by 0.1% with one hour remaining in today's forgettable session.
Today's economic data was limited to the weekly MBA Mortgage Index (+2.8%), but tomorrow will be a bit more busy, featuring the second estimate of Q2 GDP (Briefing.com consensus 2.0%), the Pending Home Sales report for July (consensus 0.5%), and weekly initial claims (consensus 302K).
Elsewhere, Treasuries are on their highs with the 10-yr yield down four basis points at ... More
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