Over the weekend Phil Mickelson came out saying that he may leave his residence in California to escape the new burden of higher taxes. The media slammed him in multiple ways and he has since apologized for his comments. Why should he apologize? Phil is telling the truth and unfortunately the truth is something that our politicians don’t accept.
California recently passed a new tax law that raises taxes on wealthy individuals just as our congress has done. Mr. Mickelson’s tax rate is now effectively 62% if he stays in California. As a businessman who would ever think this is a good idea, when he can move and reduce his tax burden by over 13% just by relocating to Florida.
Politicians think he is being ridiculous, but the truth is the politicians don’t get it. You can’t tax prosperity without unintended consequences. This is a warning to other states that think they can raise revenue by taxing the wealthy. What the politicians in California are doing is asking people to leave their state. They will get exactly that and of course that will translate to even lower revenue and more budget deficits. It is Phil Mickelson that is owed an apology by politicians who have squandered and wasted the tax revenue and not the other way around.