Pro golfer Phil Mickelson has gotten a lot of flak for his recent comments about threatening to make “drastic changes” in his life due to state and federal tax increases. Never mind that he later backed off, saying he should have kept his thoughts to himself and apologized to those he “upset or insulted.”
Mickelson was telling the truth. If there’s anything that should upset or insult Americans, it’s just how much of their money the government takes. Mickelson estimates that more than 60% of his earnings are snatched in federal and state taxes (he lives in California). Should a private citizen, no matter how successful, really owe the government more than half of what he or she makes? Intuitively, this cannot make sense to anyone who believes in the principles of hard work and personal responsibility.
But Mickelson’s comments reveal something far more profound. He was talking about an increasingly complex tax code that also reserves special punishment for small businesses, working families and even the little guys. The rich, like Mickelson, can hire high-priced lawyers and accountants to compute their taxes and take advantage of loopholes. Or, they can pick up and move. The middle class is not quite so fortunate; most cannot simply pick up and move to a better economic climate.
A high income-tax state like California is not just driving away successful men and women like Mickelson, but driving businesses out, too. This ultimately results in even less tax revenue, which sinks California’s economy even more.
Massive state government spending leads to higher taxes. More taxes lead to less government revenue because overtaxed businesses and higher income individuals depart for more business-friendly states. This vicious cycle hurts average citizens and the most vulnerable alike.
From the payroll tax hike surprise that most workers found in their first paycheck of 2013 to Medicare tax increases to raising top tax rates to nearly 40%, Washington has made life more difficult for most Americans. When companies raise prices to pass the cost of the corporate income tax — now the highest in the developed world — on to consumers, these “hidden taxes” hit fixed-income families the hardest.
I have never seen it quite so bad for job creators. Today, many are being punished for just doing business. Confiscatory taxes. Suffocating regulations. Stifling energy costs. There is only one way to create the jobs we need: we must put our fiscal house in order. Our nation must lower tax rates to be more competitive and to incentivize businesses to invest and job creators to grow their businesses. Pro-growth policies will lead to more businesses and more jobs; these jobs will create more taxpayers and government revenue.
After the unfair treatment Mickelson received from partisans and the press, we won’t likely hear from him again soon on economic policy. That’s unfortunate, because his frank talk on taxation is the kind of discussion America needs.
Fran Tarkenton is founder and CEO of OneMoreCustomer.com, NFL Hall of Fame quarterback, and member of the Job Creators Alliance.