Taxes On Olympic Medals, Allison Schmitt swam a sizzling final leg to lead the U.S. to a gold medal in the 4×200 freestyle relay Wednesday.
Congratulations, Allison. You now owe the IRS $26,679. That’s what she gets for winning two golds, a silver and a bronze medal at the Olympics. It takes years of training and sacrifice to get to win one for your country, and this is how your country thanks you? Doesn’t exactly make you proud to be an American.
With tax “fairness” a big election issue, Florida Sen. Marco Rubio sensed a political opening. Or maybe he’s just been overcome by the Olympic spirit. He introduced a bill Wednesday that would eliminate the tax American athletes must pay for their work in London.
“We can all agree that these Olympians who dedicate their lives to athletic excellence should not be punished when they achieve it,” Rubio said.
Even if he doesn’t agree, Treasury Secretary Tim Geithner knows it’d be bad optics to meet the U.S. team plane at the airport and start handing out IRS bills.
This all came about after the Tax Reform Foundation released a simple study on the tax implications of Olympic success. The USOC awards athletes $25,000 for each gold medal, $15,000 for each silver and $10,000 for each bronze.
The value of the metal in the medal is also taxed. At current commodities prices, a gold is worth $675, a silver is worth $385 and a bronze less than $5.
At the top income rate of 35 percent, that means a gold medalist will owe Uncle Same $8,896. Each silver means a $5,385 bill, and each bronze is $3,502.
Yikes, I don’t even want to think about what Phelps has had to pay over the years. Whatever the figure, Occupy Wall Street protesters would say it’s not even a fair share. They never swam 50 miles a week to get to the top of the medal stand.
Other countries have more confiscatory taxes, but the report notes that most medal winners will not be pinched. The U.S. is one of the few countries that taxes “worldwide” income earned overseas.
“Our tax code is a complicated and burdensome mess that too often punishes success,” Rubio said. “And the tax imposed on Olympic medal winners is a classic example of this madness.”
It’s hard to say what the Senate vote would be on Rubio’s bill. You can be fairly sure the U.S. Olympic athletes would unanimously pass the tax breaks.