Lefty's taxes/TobiasFunke is killing it in here with great posts (1 Viewer)

[Joe McGee]

Not so fast with that cash, Lefty.

According to a report by Forbes magazine, Phil Mickelson will sacrifice 61% of his earnings for winning both the 2013 Open Championship and the Scottish Open, all of which will go in taxes to the British and U.S. governments and to the State of California.

Great Britain still collects taxes in Scotland, where the Open Championship was held this year. (Scotland will start collecting its own taxes in 2016.)

The explanation for how Mickelson’s tax rate can get to 61% is decently long and involved, including parts on escalating tax rates and also the fact that the “UK is one of few countries that collects taxes on endorsement income for non-resident athletes that compete in Britain.” Forty five percent of Mickelson’s winnings will go to Great Britain, with 13% going to California and the remaining going to the United States government.

The long and short is that 61% will go to taxes, and that’s before Mickelson pays his caddie, pays for his hotel and expenses, pays his agent, etc. All in, Mickelson will probably walk away with about 30% of the money he earned.

Doubling the pain? Mickelson also won the Scottish Open the week before the Open Championship, which will be taxed at the same rate. For winning both tournaments, Mickelson earned £1,445,000, or about $2,167,500. After taxes, he’ll take home $842,700, with a bit over $1.3 million going to taxes. We assume all of the money taxed by Britain will go directly to the Royal Baby’s Binkie Fund.

Now, it’s tough to feel any sort of sympathy at all for Mickelson, who just won the Open Championship, makes a boatload of money in endorsements and such (he was ranked as Forbes’ #7 highest-paid athlete), and all-in-all seems to have a pretty good life. This is also the guy who said he might move away from California because of the state taxes there. No tears shall be shed for him. But man. Sixty-one percent is a lot of percent.

Wouldn't those be deductions before taxes?

How dare you suggest that a column featuring lines like "we assume all of the money taxed by Britain will go directly to the Royal Baby's Binkie Fund" may have possibly made a mistake in their scholarly analysis of this subject.

First, Todd Andrews and now you. My troll ignore list is growing.

 

[RUSF18]

137

What was...the age of Joe Louis when he fought Rocky Marciano?

 

[Steve Tasker]

The US and the UK have a tax treaty so that any tax paid there is a credit in the US. I don't think the story is entirely accurate.

That's probably why his US tax rate is 3%

That's not even really treaty-related; it's a basic foreign tax credit situation. I am surprised that he even has to pay 3% federal on that US income, given that the UK rate appears to be higher than the highest federal US rate. But I'm nowhere near an expert on US/UK cross-border tax.

 

[TobiasFunke]

Not so fast with that cash, Lefty.

According to a report by Forbes magazine, Phil Mickelson will sacrifice 61% of his earnings for winning both the 2013 Open Championship and the Scottish Open, all of which will go in taxes to the British and U.S. governments and to the State of California.

Great Britain still collects taxes in Scotland, where the Open Championship was held this year. (Scotland will start collecting its own taxes in 2016.)

The explanation for how Mickelson’s tax rate can get to 61% is decently long and involved, including parts on escalating tax rates and also the fact that the “UK is one of few countries that collects taxes on endorsement income for non-resident athletes that compete in Britain.” Forty five percent of Mickelson’s winnings will go to Great Britain, with 13% going to California and the remaining going to the United States government.

The long and short is that 61% will go to taxes, and that’s before Mickelson pays his caddie, pays for his hotel and expenses, pays his agent, etc. All in, Mickelson will probably walk away with about 30% of the money he earned.

Doubling the pain? Mickelson also won the Scottish Open the week before the Open Championship, which will be taxed at the same rate. For winning both tournaments, Mickelson earned £1,445,000, or about $2,167,500. After taxes, he’ll take home $842,700, with a bit over $1.3 million going to taxes. We assume all of the money taxed by Britain will go directly to the Royal Baby’s Binkie Fund.

Now, it’s tough to feel any sort of sympathy at all for Mickelson, who just won the Open Championship, makes a boatload of money in endorsements and such (he was ranked as Forbes’ #7 highest-paid athlete), and all-in-all seems to have a pretty good life. This is also the guy who said he might move away from California because of the state taxes there. No tears shall be shed for him. But man. Sixty-one percent is a lot of percent.

Wouldn't those be deductions before taxes?

How dare you suggest that a column featuring lines like "we assume all of the money taxed by Britain will go directly to the Royal Baby's Binkie Fund" may have possibly made a mistake in their scholarly analysis of this subject.

First, Todd Andrews and now you. My troll ignore list is growing.

I don't think you know what the word "ignore" means.

 

[drummer]

Lefty wanted the Claret Jug. Means more to him than $$.

 

[Joe T]

So did Tiger find out about the tax rates Sunday morning and decide it wasn't worth the effort?

 

[Don Quixote]

The US and the UK have a tax treaty so that any tax paid there is a credit in the US. I don't think the story is entirely accurate.

That's probably why his US tax rate is 3%

That's not even really treaty-related; it's a basic foreign tax credit situation. I am surprised that he even has to pay 3% federal on that US income, given that the UK rate appears to be higher than the highest federal US rate. But I'm nowhere near an expert on US/UK cross-border tax.

The Forbes' article spells that out. The 3% is non-creditable self-employment tax and Medicare surtax.

...I'm not sure what the big deal is. The U.S. taxes foreign golfers too. There were recent Tax Court cases involving Retief Goosen and Sergio Garcia.

 

[timschochet]

Forget Lefty- he's a multi-multi millionaire (billionaire, perhaps?) and this won't affect him one iota.

The larger question is this: does the high tax rate in England and Scotland benefit the people of England and Scotland?

I would argue that it does not. I believe that it makes free enterprise and innovation much more difficult, and places an artificial ceiling on the potential prosperity of the British Isles. -*

 

[Steve Tasker]

The US and the UK have a tax treaty so that any tax paid there is a credit in the US. I don't think the story is entirely accurate.

That's probably why his US tax rate is 3%

That's not even really treaty-related; it's a basic foreign tax credit situation. I am surprised that he even has to pay 3% federal on that US income, given that the UK rate appears to be higher than the highest federal US rate. But I'm nowhere near an expert on US/UK cross-border tax.

The Forbes' article spells that out. The 3% is non-creditable self-employment tax and Medicare surtax.

...I'm not sure what the big deal is. The U.S. taxes foreign golfers too. There were recent Tax Court cases involving Retief Goosen and Sergio Garcia.

I kinda wondered if it had to do with that, actually, but I didn't read the Forbes article. Thanks

I actually did read a bit of the Goosen stuff. Never seen the Garcia case though. How recent was it?

 

[Frostillicus]

Forget Lefty- he's a multi-multi millionaire (billionaire, perhaps?) and this won't affect him one iota.

The larger question is this: does the high tax rate in England and Scotland benefit the people of England and Scotland?

I would argue that it does not. I believe that it makes free enterprise and innovation much more difficult, and places an artificial ceiling on the potential prosperity of the British Isles. -*

omg

 

[Tom Hagen]

That settles it, I am not playing in the British Open next year.

 

[Joe McGee]

Forget Lefty- he's a multi-multi millionaire (billionaire, perhaps?) and this won't affect him one iota.

The larger question is this: does the high tax rate in England and Scotland benefit the people of England and Scotland?

I would argue that it does not. I believe that it makes free enterprise and innovation much more difficult, and places an artificial ceiling on the potential prosperity of the British Isles. -*

omg

 

[Mario Kart]

Forget Lefty- he's a multi-multi millionaire (billionaire, perhaps?) and this won't affect him one iota.

The larger question is this: does the high tax rate in England and Scotland benefit the people of England and Scotland?

I would argue that it does not. I believe that it makes free enterprise and innovation much more difficult, and places an artificial ceiling on the potential prosperity of the British Isles. -*

You need to ask a Brit. Try www.footballguys.com for their local sport's message board.

Ah, damnit. the site you should go to is www.soccerguys.com or www.fifa.com to ask.

 

[Don Quixote]

The US and the UK have a tax treaty so that any tax paid there is a credit in the US. I don't think the story is entirely accurate.

That's probably why his US tax rate is 3%

That's not even really treaty-related; it's a basic foreign tax credit situation. I am surprised that he even has to pay 3% federal on that US income, given that the UK rate appears to be higher than the highest federal US rate. But I'm nowhere near an expert on US/UK cross-border tax.

The Forbes' article spells that out. The 3% is non-creditable self-employment tax and Medicare surtax.

...I'm not sure what the big deal is. The U.S. taxes foreign golfers too. There were recent Tax Court cases involving Retief Goosen and Sergio Garcia.

I kinda wondered if it had to do with that, actually, but I didn't read the Forbes article. Thanks

I actually did read a bit of the Goosen stuff. Never seen the Garcia case though. How recent was it?

Earlier this year: http://taxprof.typepad.com/taxprof_blog/2013/03/golfer-sergio.html

 

[B-Deep]

Forget Lefty- he's a multi-multi millionaire (billionaire, perhaps?) and this won't affect him one iota.

The larger question is this: does the high tax rate in England and Scotland benefit the people of England and Scotland?

I would argue that it does not. I believe that it makes free enterprise and innovation much more difficult, and places an artificial ceiling on the potential prosperity of the British Isles. -*

being neither English nor Scottish, and seeing as how the tax debates in our country are so laboriously ridiculous, i really could not (or could) care less about the debate of British tax rates and their impact on the British Empire (such as it is)

i believe that George Washington and the guy form assassins creed killed a bunch of redcoats with their bare hands specifically so i would not have to care about British taxes, and god bless them for that.

here, this explains it

http://www.youtube.com/watch?v=t-9pDZMRCpQ

 

[Joe T]

Can I get a link to any of the "great posts"?

 

[B-Deep]

ALTHOUG

george the 3rd tried to tax us

and now we have a potential King George the whatevereth.....

perhaps he'll try and revisit that whole "Independence" thing

 

[mquinnjr]

Yikes...hope this is just probing Phil for information on Icahn and Walters...

ETA: Sorry for the WSJ protected link, here's the NY Times: http://dealbook.nytimes.com/2014/05/30/insider-trading-inquiry-includes-mickelson-and-icahn/?_php=true&_type=blogs&_r=0