A couple things of note from the world of golf this past week: Tiger Woods won his eighth tournament at Torrey Pines, and The Phil Mickelson Apology Tour is still, apparently, in full swing. Before playing some unexceptional rounds at the Farmers Insurance Open, the four-time major champion continued seeking forgiveness for earlier remarks about his taxes.
“I’ve made some dumb, dumb mistakes,” Mickelson chuckled, “and, obviously, talking about this stuff was one of them.”
For those who haven’t followed the story, Mickelson — nicknamed, “Lefty” for his big, left-handed swing — found himself in the center of a media firestorm earlier this month after suggesting that new state and federal income taxes may lead him to make “drastic changes” in his personal life.
When asked if such drastic changes might include leaving California or even relocating to Canada, the world’s 22nd-ranked golfer left the door open.
“There are going to be some drastic changes for me,” he said, “because I happen to be in that zone that has been targeted both federally and by the state and, you know, it doesn't work for me right now. So I'm going to have to make some changes.”
Mickelson was referring to both federal tax increases and California’s recently passed Proposition 30, which retroactively raised taxes on the state’s highest earners.
“But if you add up,” Mickelson continued, “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.”
Naturally, the guardians of fiscal morality stepped forth to scold Mickelson for being everything from ungrateful to unpatriotic. Fearful of becoming America’s Gerard Depardieu, the French actor who recently fled to Russia to avoid his own country’s progressive taxes, Phil quickly began his interminable apologizing. By then, of course, the left-wing smear machine had been irreversibly activated.
Tom Ley, writing for the endlessly sanctimonious Deadspin, offered Mickelson his mock condolences. “Poor guy,” scoffs Ley, “He can’t even afford to buy a share of a baseball team anymore,” referring to the golfer’s previous interest in the San Diego Padres.
Michael Tomasky of the Daily Beast (which I think used to be Newsweek) offered his own financial insight. Tomasky, having recently finished reading a really good blog post, concluded that Mickelson must employ “America’s Dumbest Accountant” if he is actually paying north of 60% of his income in taxes. Surely, with the plethora of deductions and loopholes available to the rich, Phil has to be paying at least somewhat less than he claims.
Of course, it doesn’t really matter to the left whether Mickelson’s math is accurate or not. To the contrary, Tomasky points out that even if the golfer does fork over 63% of his earnings, that’s cool too. “Then the poor fellow was living on a mere $17.4 million last year,” he snarks.
And what about Lefty’s quick back peddling? Wasn’t his original apology sufficient?
“Just another reason to root against him,” pouts Tomasky.
If liberals have a problem with pro golfers relocating to tax-friendly destinations, they may want to start following a different sport. And we’re not just talking about Californians like Mickelson. In fact, over the past few years, Europe has watched helplessly as many of its most talented players flee to states like Florida for lucrative endorsements and a vastly improved tax climate. Heck, Europe’s Ryder Cup teams have been chock-full of ex-pats for years.
Peter Hanson? A Florida resident. Justin Rose? Florida again. Lee Westwood? You guessed it: The Sunshine State. Even Rory McIlroy, the world’s number one golfer, recently decided to ditch his home in Northern Ireland for a swanky new mansion in Palm Beach County.
To be sure, it’s impossible to know exactly what role taxes played in each man’s ultimate decision to pick up stakes. What is certain, however, is the near unanimous preference for Florida over equally sunny Southern California.
Even the great Tiger Woods, when asked for a reaction to his rival’s comments, revealed that taxes were a factor in his own decision to leave California — for Florida — in the mid-nineties. “Well, I moved out of here back in ’96 for that reason,” Woods stated matter-of-factly.
Tiger could have ended his remarks with, “What? You guys look surprised.”
So why does Lefty, who has paid California taxes for years, receive such vitriol when the rest of the PGA seems destined for Orlando and Boca Raton?
Was his 63% figure too high? Should it have been a more reasonable 52% (which remember, according to the Daily Beast, wasn’t really the point)? I mean, it’s not as though Phil did anything unforgiveable, like criticize Obama. He doesn’t appear to be asking for a handout or for Deadspin’s snotty faux-sympathy. Rather, Mickelson is simply expressing the possibility that he, like Tiger Woods and millions of Californians before him, might relocate to a place where he can keep a larger chunk of his paycheck.
Liberal outrage is a funny thing. It usually springs from a sense of political self-preservation. Mickelson’s real sin was putting a face — a very recognizable face — on an economic reality that Democrats are determined to avoid: Higher tax rates do not guarantee more tax dollars. In fact, as Woods’ comments demonstrate, they often result in driving tax dollars away.
California has long considered itself America’s “Promised Land.” It’s natural beauty unsurpassed, it boasts both the innovations of Silicon Valley and the glamour of Tinsel Town. Despite its historic advantages however, modern California finds itself in something of an economic death spiral. Not only does it have the highest deficit of any state (the governor's specious surplus projections notwithstanding). But now, as Mickelson well knows, it claims the highest income taxes as well (incredible how those two features go together).
Unsurprisingly, California’s legislature has long been dominated by the Democratic Party, which now maintains a supermajority in both chambers. Through a series of poor economic policies, California has seen its tax base dwindle and its deficits skyrocket. According to a recent study by the Manhattan Institute, since 1990 the Golden State has witnessed a staggering 3.4 million residents pack up and go.
In this context, the invective hurled at Mickelson makes sense. Lefty’s potential departure — and the tax dollars he would take with him — can only shine light on the failures of Democratic ultra-progressive tax policies. Rather than actually bring more resources into the state, confiscatory tax rates do little more than motivate the richest section of the base to either shelter their wealth or simply leave town all together.
Liberals can’t make an economic argument for millionaires like Mickelson and Woods to stay put. Their best hope of keeping Lefty in California is to bully and shame him into submission. Such tactics may work on pro athletes, who rely on the public’s goodwill for endorsements dollars, but they will prove less effective on the majority of wealthy tax payers who will never appear on the cover of Sports Illustrated.
Advocates of California-style taxes might pat themselves on the back for devising a fair and equitable system, but they haven’t done the state any favors. There are no moral victories in tax policy. Grandstanding and bullying won’t keep the state’s lights on, at least not long term.
Regardless of one’s feelings toward Mickelson, California needs Lefty (and rich folks like him) to keep living on its sunny shores. With Democrats firmly entrenched, however, and anti-rich sentiment sky high, expect California to keep swinging big with even higher tax rates…and landing in the rough.
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