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Senator proposes Olympic tax break

By Kay Bell · Bankrate.com
Thursday, August 2, 2012
Posted: 9 am ET

Olympic athletes train for years for a few minutes of glory and those precious metal medals.

At today's commodity prices, the value of a gold medal is about $675. A silver medal is worth about $385. A bronze medal comes in at just under $5.

The medalists also get some cash.

A gold-medal winner receives $25,000. The second place silver is worth $15,000. A bronze for getting onto the third spot on the podium is worth $10,000.

And yes, the Internal Revenue Service gets a piece of the Olympic cash. The value of the prizes, that's the medals themselves, along with the cash awards are added to the winners' total incomes at tax filing time.

The anti-tax group Americans for Tax Reform crunched the numbers using the top possible individual income tax rate of 35 percent to come up with the most that an Olympic victories could cost successful U.S. athletes.

Potential tax burden on Olympic winners

Medal Tax on medal Tax on cash awards Total tax burden
Gold $236 $8,750 $8,986
Silver $135 $5,250 $5,385
Bronze $2 $3,500 $3,502
Source: Americans for Tax Reform.

Now I usually don't find many tax matters where I share the sentiments of Americans for Tax Reform, the group founded by Grover Norquist and most famous for the no-tax pledge it extracts from conservative candidates.

This time, though, I also believe that Olympians should get a break, specifically a tax break.

The cash amounts given winners are not really very much when you consider all the years that Olympians train.

And cheering on our Olympic representatives is one of the very few things that can bring all Americans together, especially in a divisive presidential election year.

So it seems somewhat unpatriotic for Uncle Sam to skim off of the winners' prize money.

Sen. Marco Rubio thinks so, too. That's why he's introducing a bill that would exempt U.S. Olympic winners from paying taxes on their medals and associated honorariums.

"Our tax code is a complicated and burdensome mess that too often punishes success, and the tax imposed on Olympic medal winners is a classic example of this madness," said the Florida Republican in a statement announcing The Olympic Tax Elimination Act.

With all the other major tax legislation Congress must deal with by year's end to avoid the country falling off the proverbial fiscal cliff, Rubio's bill might not have much chance of passage.

But then we are talking about representatives and senators who tend to put off the really hard stuff in order to consider, shall we say, less pressing measures. So that might actually give the Olympic tax relief act a chance to make it into law.

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4 Comments
patty
August 07, 2012 at 11:23 am

Taxing those kids is a crime. Shame on Uncle Sam.

Kevin
August 03, 2012 at 4:21 pm

Excuse me! This is how we treat those who are representing [us] the [greatest nation] on the planet! Not just our medal recipients, but all who qualified to represent "We the People" of these United States. United is getting to be used rather loosely though these days. An other time for that discussion. We are actually taxing a very small minority of athletes for their hard work and achievements on behalf of [this] country. How low will our government stoop to take from those who give their personal best with other sportsmen and women from around the globe? Well I do have more to say on that subject, but now is not the time. Back to the issue at hand.

Our government representatives need to be replaced [from the top down] with those who have real goals and can make changes swiftly and effectively according to what "We the People" have decided what is to be right for [us]. Not for personal gain and self gratification! It must be quoted once again; when ever the government gets involved with trying to fix anything on our behalf they only cause a bigger fire for the "We the People" to extinguish with [our] tax dollars! Besides there are larger concerns on the floors of Congress and the Senate which needed attention as of 3 years and 7 months ago!

Quit kicking sand in each others faces and get done with what we pay you to do Congressmen, Senators, and on down the line to our state representatives. I do not do political correctness. Let's get all the incumbents out of office people this election year. Are we really united or we worried about touting a party line? Let [us] show them where the real power lays! Oops! There I went and got political after all.

jeremy
August 02, 2012 at 2:33 pm

Can't athletes already deduct training, travel, equipment, and other expenses associated with being an elite level athelete. There are provisions for deducting business expenses, doesn't the prize money make them a professional athlete? Or, go the hobby expense route, though you couldn't deduct more in expenses than the earnings/winnings?

Do we really to spend the time of 435 members of congress to make another tax "loophole" that maybe 100 people would use once every 4 years? Completely waste of time.