Jeffrey D. Byrne
President + CEO
As a longtime California resident, Phil Mickelson vented after shooting a final-round 66 for a 17-under-par 271 total and tie for 37th in his 2013 debut at the Humana Challenge (January 22, 2013).
Recently Phil also made headlines in the business sections of newspapers across the country. Now, as one of the best golfers in the world, I’d expect to see Phil on the sports pages. But Phil was complaining about the California voters’ approval of Proposition 30 – which would cause an increase in the income tax rates by 3%. He threatened to pick up and move his family and residence to another state.
I was interested in what’s been happening with this and yesterday saw a clip on Fareed Zakarias GPS on CNN. Interestingly enough, a recent study by Christopher Young (Stanford) and Charles Varner (Princeton) about New Jersey raising the top income rate by 2.6% on incomes over $500,000 in 2006 (pre-Governor Chris Christie) showed some interesting results.
First, yes – New Jersey lost revenue or forgone levies of $16,400,000. But second, New Jersey saw 65 times this lost revenue made with nearly $1,000,000,000 (yes that’s Billion) in new revenues. This new revenue was from the increase in the tax but also from new income earners coming into the tax rolls at this level. Other studies in California and Maryland have shown similar findings.
Now, I’m not advocating across the board tax increases for millionaires and high income earners. Clearly, you can question policies, but not the numbers. Clearly, an increase on high earners does generate more money than it produces losses. This is true up to a point. That’s what the states and federal government are debating, and that’s why I think it’s so interesting to be involved in the business of philanthropic fundraising and fundraising consulting. We deal every day with the Phil Mickelsons of the world, and can share a little information around facts, just not opinion.
Now, I’m a fan of Phil’s and a great admirer of his. Here’s what he said the next day: “My apology is for talking about it publicly, because I shouldn’t take advantage of the forum that I have as a professional golfer to try to ignite change over these issues.” Mickelson said he understood immediately that his comments could be seen as unsympathetic. “I think it was insensitive to talk about it publicly to those people who are not able to find a job, that are struggling paycheck to paycheck,” he said.
For the record, my Internet search over the weekend about Phil’s residency couldn’t find that he has moved. Stay tuned.