Phil Mickelson's tax rate: 61%

The golfer comes away from his victories in Scotland with a high bill from the UK.

By Kim Peterson Jul 24, 2013 1:09PM
File photo of Phil Mickelson in July 2012 (© Hunter Martin/Getty Images)Phil Mickelson got into some hot water earlier this year when he complained about getting socked with a tax rate of more than 60%. Observers said there's no way the star golfer would pay that much, even in his tax-friendly home state of California.

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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180Comments
Jul 24, 2013 1:31PM
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What are you saying? I thought the rich paid NO taxes, the libs told me so.
Jul 24, 2013 3:50PM
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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!

Jul 24, 2013 3:52PM
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Phil makes his money on his own efforts........not on the backs of others.

 

One of the 'good' rich.

Jul 24, 2013 3:42PM
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and you all want to be more like Europe.  Go ahead.  I heard these horror stories from friends living over there and they're amazed when americans say they want something like Europe.  Their tax rates are worse than ours. Their health benefits are horrendous.  The average American on welfare lives better that the middle class in Europe.  Yeah, I like to use them as my role model. 
Jul 24, 2013 3:59PM
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Either way you look at it the situation is criminal. Any one who thinks taxing citizens more to pay for out of control programs, military, social programs, etc. is out of their minds. We all strive to be wealthy. We sure don't want to get there on hard work to be penalized by the government and ostracized by an envious society.
Jul 24, 2013 3:53PM
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Governments simply exist to shake citizens down for money.  The poor should be kissing his butt - it is because of him they eat, have a roof over their head etc - sounds harsh but it is true.
Jul 24, 2013 4:46PM
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It should be illegal to take more than half of someones hard earned money. It's legal stealing and disgusting. It's government completely out of control and a good example of what the US has in store if they don't stop what's going on now.

 What a miserable place it must be to live where the people are expected to be obsequious to the royals and be robbed of their money by the government.
Jul 24, 2013 4:16PM
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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.

Jul 24, 2013 4:48PM
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Just goes to show all the worlds goverments are theives and greedy. They line their own pockets with special interest groups and health benefits that are fit for a king. Obama is right there with them. He is a socialist pig and the worst president in my 57 years of living. Why would any NFL team want to play there. Roger Goddell must be in bed with the Prime Minister. Phil that was the greatest final 6 holes ever. You play the game with zest and good feeling toward all opponents and I love your smiling at the fans. Congrats Phil and the US Open will be yours soon. 
Jul 24, 2013 3:41PM
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Apparently, Bones will get tapped pretty hard on his taxes, too!  That is a lot of tax money.  Of course, the Queen and her family will profit quite well from that tax money! 
Jul 24, 2013 5:12PM
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Why in the world would he continue to stay living in Mexifornia anyway. Time to leave Phil.
Jul 24, 2013 4:20PM
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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

Jul 24, 2013 5:05PM
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But remember, according to our illustrious President, he makes SO much money that he needs to pay his "fair share".
Jul 24, 2013 4:51PM
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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.

Jul 24, 2013 4:35PM
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That's the reason the Beatles hauled **** years ago.  Gotta pay for George Alexander Louis's circumcision! 
Jul 24, 2013 4:49PM
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Well I think a boycott of this country´s sports events is in order.  How can it be possible to give the government more than half of what you earn? Totally out of the question......
Jul 24, 2013 3:49PM
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Time for another tea party!  No, I mean a party with tea!

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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.

Jul 24, 2013 4:58PM
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Prez Obuma and Gov Brownie love Phil .....they love him all the way to the Bank!

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