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|
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.
Want the latest tax news and tax-saving tips? Get it without any time difference delays by subscribing to Bankrate’s free Weekly Tax Tip newsletter.
You also can follow me on Twitter @taxtweet.