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No matter how many times it is proven, there are those who refuse to accept that high rates of taxation reach a level of diminishing returns.Rich people often vote with their feet. Recently, this was in the news in France when actor Gerard Depardieu decided to escape the 75% tax rate under the new socialist government. Now we have a high-profile case right here at home. Golfer Phil Mickelson may be accustomed to the spotlight for his performance on the course, but has now found himself in the news for an entirely different reason.
Ranked in the top 25 best golfers in the world, Mickelson took in around $45 million last year on the course and through endorsements. Last weekend, while doing press at the Humana Challenge, he said that “There are going to be some drastic changes for me because I happen to be in that zone that has been targeted both federally and by the state.”
In explaining his statements, Mickelson said "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 is 62, 63 percent, so I've got to make some decisions on what I'm going to do." Those on the right understand that Mickelson will not be the last to make such a decision, and take those tax dollars to other states. Assembly Minority Leader Connie Conway, R-Tulare, said "It's sad, and I think it'll be the first of many."
He’s not the only golfer to make this decision. A native Californian, Tiger Woods left the state when he turned pro. When asked about Mickelson’s comments on taxes, Woods said ''I moved out of (California) back in '96 for that reason.'' If Mickelson leaves, California will have lost the two top paid players in the game. Of course, there are many others who will not stand for these rates of taxation either.
Even if he stays in California, Mickelson has already had to reduce investment in the local economy. While he was originally part of a group that bought the San Diego Padres, he confirmed that he “absolutely” withdrew due to California’s tax changes. If he leaves, he will take more than just his tax revenue. The Phil and Amy Mickelson Foundation, for example, focuses on helping the less fortunate in the San Diego area. Will their focus move to another state if the Mickelsons do so? It seems like, once again, politicians can’t see the forest for the trees. They are trying to squeeze money out of taxpayers without a thought to the results.
Those states which do understand the Laffer Curve are now vying for Mickelson’s residency. Texas Governor Rick Perry tweeted him “'Hey Phil....Texas is home to liberty and low taxes...we would love to have you as well!!'' It looks like Mickelson will have a lot of attractive options from which to choose and California will, once again, foolishly drive out a boost to their economy.