During a press conference held on Tuesday, Tiger Woods backed Phil Mickelson’s earlier comments concerning California’s high tax rates, and cited them as his main motivation for leaving the state in 1996.
Despite the obligatory plea to pay one's “fair share” argument that such a move will prompt, Woods’ and Mickelson’s statements may prove to be the majority’s sentiment, causing others to follow suit.
Mickelson, in a Sunday press conference, made his views concerning California’s tax rates public, and vowed the he may have to make “some drastic changes.” Mickelson went on to say that those changes are prompted because, “I happen to be in that zone that has been targeted both federally and by the state, and it doesn't work for me right now,"
The “zone” that Mickelson referenced is comprised of America’s top earners, many of whom are already facing federal tax increases and some having to suffer through state tax increases as well. Tax rates for top earners are especially high in California, due to the passing of Proposition 30 in November, which significantly raises taxes on those making over $250,000 per year.
Mickelson, if he decides to stay in California, would lose over 60% of his yearly earnings to taxes, and has already dropped a major investment due to the increases.
Mickelson, originally from San Diego, wanted to invest in his hometown, which led him to join a group of investors that bought the San Diego Padres. Mickelson, however, has since rescinded his involvement, and cited that the tax increases were “absolutely” the reason for his withdrawal.
In addition to a minor backlash and the oh-so predictable apology, Mickelson’s comments sparked Tiger Woods to defend Mickelson on the matter during a press conference Tuesday afternoon.
Woods — who now resides in Florida, where no state income tax exists — stated, “I moved out of here [California] back in ’96 for that reason,” leaving no questions of where he stands on the issue.
The comments by Woods and Mickelson are all too reminiscent of Gerard Depardieu, who fled France due to its 75% tax rate on the wealthy — a move that has recently been replicated by former French president Nicholas Sarkozy, who is making plans to leave France for the same reasons.
Despite being billed as a necessity, it appears as if a high tax rate only motivates high-earners to find cheaper living, ultimately causing tax revenues to dry up. Proving that the Laffer (and Lovitz) Curve may hold true.
California, which has an obscenely high debt burden of at least $167 billion, is mistaking their spending problem for a revenue problem, and will most likely solve neither by raising taxes. As it appears now, the only problem that the state is going to solve is its crowded highways — assuming that more follow the lead of Mickelson and Woods.