Tuesday, January 22, 2013

Phil Mickleson and Incentives

Mountain man and trout reaper @wolverine280 brings us the story of PGA golfer, Phil Mickleson, who has decided that he may need to make "drastic changes" because of the 60% tax rate he faces living in California and facing steep Federal and state taxes.

Look. It's pretty simple. If you can move from California to Florida and save a bunch of money in the process, is it really that hard of a decision? We are all obligated to pay taxes, but we aren't obligated to stay in any particular state. If one state is more tax friendly (and has equivalent golf) why shouldn't Mickleson move? Heck, tons of PGA pros have their residence in Florida. I know that he regrets getting political. He's got tons of fans that he doesn't want to alienate. He can't say what he really thinks, so I'll say it for him: the taxes are too damn high.

The important thing here is that incentives matter. People almost always act in their self-interest. Mickleson leaving California is what is best for him and his family, because he'll have more money to spend on his family.

He won't be the last wealthy person to leave the Golden State in his rear-view mirror.

1 comment:

  1. @Wolverine280 adds: "it's like that old SimCity game. Raise the taxes too much, people move away."

    I couldn't have put it any better.

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