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Monday, January 21, 2013

Popular golfer Phil Mickelson hints at retirement because of tax increases

Mickelson says he will probably speak more in depth about the issue soon

The popular golfer earned about $60 million last year. If he is correct and the increase in taxes in California and federally add up to about 63 percent of his pay, his after-tax money would be about $22 million.

The payroll tax holiday, which was allowed to expire at the end of 2012, means middle and lower-income wage-earners are taking home 2 percent less in their pay because of the resulting tax increase, and much of the coming spending cuts will target programs upon which they rely upon. The wealthy are largely spared from payroll taxes. They pay on the first $110,000 or so, but the bulk of their income is not subject to that tax. And those who make most of their money through a variety of interest payments pay a lower tax rate than those who are salaried.

Taxes have been too low for the wealthiest Americans for the past decade, which is one of the primary causes of our deficit, and entitlement programs must be reformed - which will mean benefit cuts of some kind - because they are the largest driver of our long-term debt.

I guess once that happens, and the country's fiscal health is put back on surer footing because of targeted tax increases and spending cuts and reform, everyone will have something to complain about. But in practical terms, a 2 percent rise in taxes and cuts to social programs hit those at the lower end of the income scale harder than even the combined tax rate someone like Mickelson says he now pays, given their enormous salary.


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