Tag: McCaffery

Zuckerberg’s Tax Burden: $2 Billion and Done

EDWARD J. McCAFFERY, professor of law, Gould School of Law.

This op-ed originally appeared at CNN on April 9.

So, you think you have it bad this tax season. Have you heard that Facebook founder Mark Zuckerberg will pay between $1 billion and $2 billion in taxes? That sounds like a tough pill for anyone to swallow.

But it is premature to start a pity party for Zuckerberg. The twenty-something billionaire reaped large financial gains from exercising the stock options that triggered his tax bill, and he has benefited from favorable tax rules along the way. Even better, Zuckerberg will survive his encounter with the tax man in a position to never have to pay taxes again for the rest of his life.

Mickelson’s in a Tax Trap

EDWARD J. McCAFFERY, professor of law, economics and political science, USC’s Gould School of Law.

This op-ed originally appeared at CNN on Jan. 25.

Phil Mickelson, aka Lefty, is thinking of leaving California and perhaps America because, according to his own reckoning, he is facing tax rates of 62% or 63%. Mickelson, probably the second-most-famous professional golfer in the world after Tiger Woods, later backed off from his initial comments about making “drastic changes.”

Reports suggest that Mickelson earned more than $60 million in 2012. In that sense, he appears to be doing better than the Romneys, and perhaps you are not all that sympathetic to him.

The Great Diversion: Romney’s Taxes

EDWARD J. McCAFFERY, professor of law, economics and political science, USC’s Gould School of Law.

This op-ed originally appeared at CNN.

By now, most of us have probably heard that Mitt and Ann Romney paid just under $2 million in taxes on income — virtually all from investments — of just under $14 million for 2011, an effective tax rate of 14.1%. This is a low tax rate, lower than the typical middle-class American worker pays, especially when one considers payroll taxes, the largest burden for most Americans. It should concern us that individuals of Romney’s wealth — analysis has put his personal fortune as high as $250 million, not counting some $100 million in trusts set up for his five children — pay so little as a percent in taxes.