You know how, whenever the Powerball payout gets really big, someone wanders around your office collecting for a lottery pool? And you know how there is always one guy who takes that moment to explain that winning the lottery isn't so great because taxes? By the time lottery winners take the smaller lump-sum payment and all the taxes are paid, he loudly explains, that $100 million payout is suddenly only worth like $25-$30 million. And if other people also picked the same numbers, then the prize is split. And then you have to split that with everyone else in the pool. Probably, if you win, you'll only end up with a a million or two and who can even live on that?
Nobody, anywhere in the country, pays 63%. Nobody. Noone at all.
Perhaps Phil has forgotten that SS caps out at $110,100?
Perhaps he&#039;s also forgotten that state taxes are deductible from Federal income. Perhaps he&#039;s a total moron and so&#039;s his accountant and as a result he&#039;s not making that deduction, in which case, he <em>should</em> fire himself and his accountant.
Perhaps, further more, he&#039;s forgotten that your <em>marginal</em> tax rate is not even remotely close to your <em>effective</em> tax rate.
But let&#039;s assume that Phil&#039;s accountant doesn&#039;t deserve to be fired, sued, and then immolated, in that order. Let&#039;s assume Phil&#039;s account can successfully fill out a Schedule A.
Phil&#039;s top Federal marginal rate will be 39.6% for 2013, on income over $450,000. His top State marginal rate will be 10.55%, on income over $1,000,000. Note that both of these rates kick in vastly in excess of the SS cap, or in his case, the SE cap, but basically same thing. On his top dollar, he&#039;ll pay 3.8% Medicare tax and 10.55% state tax. On the 89.45% after deducting state tax, he&#039;ll pay 39.6% FIT. That&#039;s 49.77%. On his top dollar.
I hate liars.
For comparison, in 2008, Phil would&#039;ve paid 2.9% Medicare tax, 9.3% top State marginal rate and 36% top Federal marginal rate. That would&#039;ve made his overall top-dollar tax 44.85%.
So, his post-tax income on his top dollar will be reduced by a total of just under 9%. Does he really expect us to believe that swinging a metal stick at a lump of coated rubber a few hundred times a day with some driving around in a golf cart in between is such a tremendous burden to him that a 9% difference in a post-tax income of tens of millions is enough to make him stop?
If Phil&#039;s quitting, it&#039;s because his rheumatoid arthritis he gets paid a fucking fortune to tell us about every ad break is playing up. Or because he wants to spend more time with his moobs. Only a total idiot would choose to quit working because their effective tax rate went up a small amount.
Phil pays SE tax or something, which is equivalent to both employee and employer components of FICA.
This has no measurable effect on his effective tax rate because the total amount of that tax before it caps out* ($14,079 for 2013) is way less 0.1% of his annual gross.
(Actually, that&#039;s just the SS component of SE tax, SE tax also includes the Medicare tax, which will be 3.8% for Lefty Dumbfuck, because he is insanely rich)
While Phil is easily over-overestimating his combined tax rate by 10% or more, it is true that he derives a good chunk of his income from Tour earnings and endorsements, which are pretty much taxed as ordinary income. Mittens derives almost all of his income from capital gains, or phony capital gains, which are taxed at a much lower rate (Federally).
So, it wouldn&#039;t be surprising if Phil was paying a somewhat higher effective rate.
Phil Mickelson is a motherfucking liar. Period.
Nobody, anywhere in the country, pays 63%. Nobody. Noone at all.
Perhaps Phil has forgotten that SS caps out at $110,100?
Perhaps he&#039;s also forgotten that state taxes are deductible from Federal income. Perhaps he&#039;s a total moron and so&#039;s his accountant and as a result he&#039;s not making that deduction, in which case, he <em>should</em> fire himself and his accountant.
Perhaps, further more, he&#039;s forgotten that your <em>marginal</em> tax rate is not even remotely close to your <em>effective</em> tax rate.
But let&#039;s assume that Phil&#039;s accountant doesn&#039;t deserve to be fired, sued, and then immolated, in that order. Let&#039;s assume Phil&#039;s account can successfully fill out a Schedule A.
Phil&#039;s top Federal marginal rate will be 39.6% for 2013, on income over $450,000. His top State marginal rate will be 10.55%, on income over $1,000,000. Note that both of these rates kick in vastly in excess of the SS cap, or in his case, the SE cap, but basically same thing. On his top dollar, he&#039;ll pay 3.8% Medicare tax and 10.55% state tax. On the 89.45% after deducting state tax, he&#039;ll pay 39.6% FIT. That&#039;s 49.77%. On his top dollar.
I hate liars.
For comparison, in 2008, Phil would&#039;ve paid 2.9% Medicare tax, 9.3% top State marginal rate and 36% top Federal marginal rate. That would&#039;ve made his overall top-dollar tax 44.85%.
So, his post-tax income on his top dollar will be reduced by a total of just under 9%. Does he really expect us to believe that swinging a metal stick at a lump of coated rubber a few hundred times a day with some driving around in a golf cart in between is such a tremendous burden to him that a 9% difference in a post-tax income of tens of millions is enough to make him stop?
If Phil&#039;s quitting, it&#039;s because his rheumatoid arthritis he gets paid a fucking fortune to tell us about every ad break is playing up. Or because he wants to spend more time with his moobs. Only a total idiot would choose to quit working because their effective tax rate went up a small amount.
Phil pays SE tax or something, which is equivalent to both employee and employer components of FICA.
This has no measurable effect on his effective tax rate because the total amount of that tax before it caps out* ($14,079 for 2013) is way less 0.1% of his annual gross.
(Actually, that&#039;s just the SS component of SE tax, SE tax also includes the Medicare tax, which will be 3.8% for Lefty Dumbfuck, because he is insanely rich)
this is just gross.
on every level.
While Phil is easily over-overestimating his combined tax rate by 10% or more, it is true that he derives a good chunk of his income from Tour earnings and endorsements, which are pretty much taxed as ordinary income. Mittens derives almost all of his income from capital gains, or phony capital gains, which are taxed at a much lower rate (Federally).
So, it wouldn&#039;t be surprising if Phil was paying a somewhat higher effective rate.
Ok little cry baby, you don&rsquo;t have to pay taxes but we&rsquo;ll charge you $10 million per game. How&rsquo;s that sound? Capitalism!
Is he trying out for the Ted Knight part in a Caddyshack remake?
Winning.