Over the weekend, Phil Mickelson won the Scottish Open and the Open Championship. While winning even one PGA event is a tremendous feat, Mickelson won’t be left with much to celebrate upon his return from the U.K.
In his recent Forbes article, K. Sean Packard, CPA (Director of Tax at OFS), claims the golfer commonly referred to as “Lefty” by golf fans around the world can expect his tax liability on his earnings during the past two weeks – a total of $2,167,500 – to be a whopping 61 percent.
Without considering expenses, Mickelson will pay 61.12% taxes on his winnings, bringing his net take-home winnings to about $842,700. When expenses are considered (10% to caddy Jim “Bones” Mackay, airfare, hotel, meals, agent fees on endorsement income/bonuses—all tax deductible here and in the UK), his take-home will fall closer to 30%.
Non-resident athletes competing in the United Kingdom are also subject to being taxed on their endorsement income. It should also be noted that California does not have a foreign tax credit, thus leaving Mickelson on the hook to pay the Golden State’s top marginal income tax rate of 13.3 percent.
OH DEAR GOD. The guy made over $2 million in 2 weeks and he is only going to take home $842,700? This is robbery! How will Phil provide for his family on such a paltry sum for two weeks of hard work? Are his children going to be forced to attend — gasp — public school and drink water from the tap?!
Seriously, ATR, you're trolling way too hard here. The guy is a professional. He knows this comes with the territory and sometimes whines about it. We still aren't sure what exactly Phil is forking out for taxes over here in the good ole US of A but he seems to think it's just as bad if not worse than what he's going to shell out for this trip to the UK. Of course, that doesn't stop ATR from suggesting maybe Phil should forget the Brits completely and stick to the States:
With an overwhelming majority of his earnings going straight to the tax collectors, will this be the last time “Lefty” competes on British soil?
Again, the guy already said he's paying like 62 – 63% here at home so please, ATR, explain to all of us how paying less than that will keep him from competing on British soil? We'll wait.