By: Joseph Vranich
Political correctness in California has become so bizarre that a high-achieving citizen paying huge amounts in taxes is ostracized if he even mildly complains about those taxes.
Pro golfer Phil Mickelson has suggested “drastic changes” were in store for him – including possibly moving out of California – because of changes in federal and state taxes that puts him in an absurdly high tax category. The big tax bite was the reason behind his decision not to be part of the new ownership group of the San Diego Padres.
But the nation now has a class-warrior chorus that will defend reckless tax-and-spend policies in Sacramento and Washington while bullying people who dare speak the truth about their own tax quandaries.
An example can be seen in a Forbes online column that advises Mickelson: “Please stop whining and give thanks for being able to earn a fabulous living playing a game and selling golf clubs (even after tax). 99.999% of people would never have that option, no matter how hard they worked on their swing.” The writer should look up the definition of “whine” because that is not what the golfer was doing.
Apparently a backlash prompted Mickelson to apologize for airing his views, saying, “Finances and taxes are a personal matter and I should not have made my opinions on them public. I apologize to those I have upset or insulted and assure you I intend to not let it happen again.”
Hank Gola of the New York Daily News got it right in declaring that “Mickelson doesn’t have to apologize for anything. It’s almost more offensive that he feels compelled to apologize. He said nothing wrong. The worst thing he’s guilty of is a minor public relations gaffe …. Let’s look at Mickelson’s ‘controversial’ quotes. He said he might have to make ‘drastic changes’ because he was in the ‘(income) zone’ being ‘targeted both federally and by the state’ and that it ‘doesn’t work’ for him right now.”
That is hardly polarizing, offensive or insulting. His comments were tame.
I think the apology should be the other way around with Gov. Jerry Brown, Senate President pro Tem Darrell Steinberg, and Assembly Speaker John A. Pérez apologizing to Mickelson and the rest of us for their irresponsible spending and tax-greedy ways.
I’ll be even more provocative and declare Brown, Steinberg and Pérez to be immoral for their support of Proposition 30, which passed in November. It increased income taxes and did so in a disgraceful manner – it raised taxes retroactively to January 1st of 2012.
That’s OK with California’s politicians? Imagine if a home builder said, “We’re glad you bought that house from us in November, but we’re sending you a bill for the higher amount we wanted you to pay in January – and you have to pay it or you’ll be fined or go to jail.” Or imagine a car dealer billing you for the difference between a higher January price compared to your end-of-year purchase price. Or similar acts by your dry cleaner. Or your doctor. Can you imagine the public outrage?
If a retroactive tax doesn’t prove that Sacramento’s politicians are guilty of far more than a few bland statements from a golfer, what will? (Here’s an idea: How about some retroactive budget cuts?)
Phil Mickelson is hardly alone in his thinking. According to the Manhattan Institute for Policy Research, in their report The Great California Exodus: A Closer Look, “For the past two decades, California has been sending more people to other American states than it receives from them. Since 1990, the state has lost nearly 3.4 million residents through this migration.”
Mickelson would also be in synch with his golfing colleagues Tiger Woods and Natalie Gulbis and also with equipment manufacturers Calloway Golf and Feel Golf. All have exited California for kinder, gentler, low-tax states.
It’s been said that Tiger Woods saved many millions in taxes when he moved from California to income-tax free Florida. In the aftermath of Mickelson’s comments he said, “I moved out of here back in ‘96 for that reason. I enjoy Florida but it was also…I understand what [Mickelson] was I think trying to say.”
Several years ago, Natalie Gulbis, a golfer in the LPGA, left Sacramento for an income-tax-free state, Nevada, before her biggest paydays as a professional athlete. Also, Scott McCarron on his PGA tour amassed considerable earnings and moved to Reno with taxes as a consideration.
In 2011, Feel Golf Co., after acquiring Pro Line Sports, Inc. relocated its headquarters from Salinas in Monterey County to Sanford, Florida, with CEO Lee Miller stating, “We believe consolidating operations increases mutual synergies while significantly reduce operating costs. Florida also has tax advantages over California for the company and employees.”
A year earlier Callaway Golf Co. moved most manufacturing out of Carlsbad in San Diego County to Monterrey, Mexico. George Fellows, CEO, said, “This decision… supports the gross margin improvements necessary to secure our leadership position in a competitive market.” Moreover, the company outsourced distribution to Ryder Logistics and the bulk of that Carlsbad work moved to Dallas in income tax-free Texas.
I continually hear from business owners who tell me of their struggles with California’s tax maneuvering. Some worry about future abuses, with one client asking, “What’s to prevent Sacramento from passing a tax increase that’s retroactive back to five years?”
Another California relocation may occur even though it doesn’t seem to have anything to do with taxes: It looks like the Sacramento Kings will become the Seattle SuperSonics. If the NBA approves, the move will occur in time for the next season. Plans fell apart in 2011 for the Kings to move to Anaheim, which put Seattle in a better position to close the deal.
Kings players who relocate to Seattle will find that Washington is another state with no income tax. That fact may interest many Californians who are teed-off by the state’s outrageous retroactive tax hike.
Joseph Vranich, Irvine-based "Business Relocation Coach" helps companies plan and select ideal sites for new facilities across the U.S. and internationally.