03 Aug 2012

US Taxing Olympic Victories

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Ryan Lochte displays his gold medal.

The Weekly Standard reports that American athletes winning medals at the London Olympics will owe the US Government money.

Americans who win bronze will pay a $2 tax on the medal itself. But the bronze comes with a modest prize—$10,000 as an honorarium for devoting your entire life to being the third best athlete on the planet in your chosen discipline. And the IRS will take $3,500 of that, thank you very much.

There are also prizes that accompany each medal: $25,000 for gold, $15,000 for silver, and $10,000 for bronze.

Silver medalists will owe $5,385. You win a gold? Timothy Geithner will be standing there with his hand out for $8,986. …

[M]ost other Olympians won’t pay any taxes on their medals because America is one of only a handful of countries which taxes “worldwide” prize income earned overseas.

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The Politico reports that at least on Republican wants to give American athletes a break.

[Senator Marco] Rubio (R-Fla.) introduced [on Wednesday] The Olympic Tax Elimination Act, which would exempt U.S. Olympic medal winners from paying taxes on their medals. Olympians receive honorariums in the form of cash payments of $25,000 for gold, $15,000 for silver and $10,000 for bronze, which the IRS currently taxes.

“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,” Rubio said in a statement. “Athletes representing our nation overseas in the Olympics shouldn’t have to worry about an extra tax bill waiting for them back home.”

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3 Feedbacks on "US Taxing Olympic Victories"

Tim B.

I would like to know when the practice of giving honorariums to Olympic athletes began and were they also taxed then?



GoneWithTheWind

If I “gave” you $10,000 you would indeed have to pay a tax on it. Why create another special exemption for a special interest? If taxing a gift or a honorarium is appropriate for us common folk why not for Olympic atheletes? Our congress has created the worst possible world in our tax code and seem hell bent to outdo themselves. Would we even be talking about this issue if it were not an election year?



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