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January 20, 2013

Mickelson plans 'drastic changes' in response to tax hikes

Posted at 10:38 PM by Mike Walker | Categories: Farmers Insurance Open, Phil Mickelson, Torrey Pines

Phil-mickelson-and-bones-taxes-blog-post
Phil Mickelson and his caddie, Jim "Bones" Mackay, at the Humana Challenge in Palm Springs on Saturday. (AP)

Phil Mickelson said he will be making "drastic changes" because of recent tax increases, including California's new, highest-in-the-nation income tax on the wealthy, and he suggested that the tax was one of the reasons he withdrew from the investment group that purchased the San Diego Padres.

"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 and, you know, it doesn't work for me right now," Mickelson said after his T37 finish at the Humana Challenge in Palm Spring, Calif. "So I'm going to have to make some changes."

Unlike most of his fellow PGA Tour players who live in tax-friendly states like Florida and Texas, Mickelson chooses to live in high-tax California, his home state, where residents voted in November to raise tax rates to 13.3 percent from 10.3 percent for those making more $1 million.

Mickelson had mentioned politics earlier in the week when he was asked about Steve Stricker's "semi-retirement." Stricker, 45, is just three years older than Mickelson.

"I think that we're all going to have our own kind of way of handling things, handling time in our career, our family, handling what's gone on the last couple of months politically, I think we're all going to have to find things that work for us," Mickelson said earlier in the week. "And it's not surprising at all, it makes perfect sense for a number of reasons, not just the ones that he gave about spending more time at home. I totally get it."

Asked Sunday to elaborate on what he meant, Mickelson said, "It's been an interesting offseason. And I'm going to have to make some drastic changes. I'm not going to jump the gun and do it right away, but I will be making some drastic changes."

Mickelson was also asked if these changes were the reason he withdrew his interest in the San Diego Padres ownership group. His response, "Absolutely."

However, Mickelson stopped short of saying what those changes would be; he added that he would likely talk in more detail about the issue this week at Torrey Pines, which is just minutes from his home in Rancho Santa Fe, Calif.

"I'll probably be in the media center, and I'll probably be a little more open to it because San Diego is where a lot more things, it's where I live, it's where the Padre thing was a possibility, and it's where my family is," Mickelson said. "And it just seems like a better fit than right here off of 18 on Palm Springs."

In addition to the state tax increase, Mickelson is also looking at a higher federal income tax. Under the new federal tax law just passed, married couples making more than $450,000 will pay a federal income tax rate of 39.6 percent, up from 35 percent.

"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's 62, 63 percent," Mickelson said. "So I've got to make some decisions on what I'm going to do."

SI.com's Fortunate 50 estimated Mickelson's 2012 income at $60.8 million.

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