August 2, 2012 by kujhawk
At some point in every person’s life, they dream of winning a gold medal in the Olympics. They dream of standing on the podium, flowers in hand, singing the national anthem. What they don’t dream about, is having an IRS check waiting for them when they get home. Yes, that’s right everyone, medals won in the Olympics are taxable, Olympic earnings are taxable and American medalists face a top income tax rate of 35 percent. Under U.S. tax law, they must add the value of their Olympic medals and prizes to their taxable income. For each gold, silver or bronze medal that an American athlete wins in London this summer, they will owe $8,986, $5,385 or $3,502.
When an athlete wins a medal, the U.S. Olympic Committee gives prize money to that athlete. $25,000 is awarded to a gold medal winner, $15,000 for a silver and $10,000 for a bronze – a nice little pay day for the best in the world. But that money is being taxed to the highest extent of U.S. law and the craziest thing about all of this is that the U.S. is the only country that does this to it’s athletes! The U.S. is the only developed nation that taxes “worldwide” earnings. China isn’t doing it, Russia isn’t, neither is Japan. So why the heck are we? This has nothing to do with sports. This is not what the Olympics are about. The Olympics are about national pride and promoting the unity of the world and it’s nations. It’s about wrapping yourself up in your country’s flag and cheering your countrymen and women on in sports that range from basketball to table tennis.
I know there is always money involved in sports, and the Olympics are no different. Bidding wars for the host city, funds for training centers and coaches for various teams all come to mind. Countries want to make money off their athletes, and that’s okay with me. Market them, use them in commercials and make them role models. But don’t tax them for their hard work and unbelievable dedication. Don’t leave them with a bill stateside that is in my opinion a slap in the face to every American Olympian who earns a medal.
For someone like Michael Phelps, one of the greatest Olympians of all time who has 20 medals in his illustrious Olympic career, the amount he has had to pay in taxes for his achievements is absurd. Before London, he had paid about $138,808 to the government. If you add in what he has done this summer in London, fresh off a gold in the 200 meter IM, his total is roughly $161,550. That isn’t chump change folks. That is a huge amount to pay for winning in the Olympics and bringing pride to your country. Obviously Michael Phelps makes a ton of money with endorsements, but what about the female gymnastics team? They are 15, 16, 17 years-old. They live at home and go to school. Their parents have to deal with the taxes on their gold medals. Or what about the silver medal winning female synchronized diving team? I’m pretty sure they aren’t raking in the dough.
But hold on a second, Olympians! Help could be on the way. Florida Senator Marco Rubio is introducing a bill called the Olympic Tax Elimination Act, which like it’s name says, will eliminate taxes on Olympic earnings. I hope it passes before August 12th. Otherwise the steep taxes on medals and Olympic earnings will still apply. So let’s get it right America! Lets remember what the Olympics is all about and treat our athletes like the superstars they are. Let’s show some true pride in our country.
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