For those athletes who don’t have endorsement deals like swimmer Michael Phelps, but who work multiple jobs to make ends meet while training, the boost in income is welcome until they realize the tax bill that Uncle Sam has in store for them.
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“Our Olympic and Paralympic athletes make numerous personal sacrifices while training to represent the United States on the global stage”, Rep.
Based on the commodity prices of the metals involved, gold is worth in the neighbourhood of $600, silver about $300 and bronze next to nothing. However, all American athletes must comply with the code as written down by the IRS, and calculate their taxes from the medal winnings likewise. Americans for Tax Reform, a conservative advocacy group, estimates gold medalists would owe $9,900 under the top individual tax rate. They argued that simply wasn’t fair: “Our Olympic athletes face a competitive disadvantage that has nothing to do with sports”. The bill, introduced by New York Sen. For the past few Olympics, Congress has toyed with the idea of making those winnings tax free. When those who win get bonuses for their medals, the income is subject to US income tax.
The value of medals won, as well as the cash prizes awarded by the US Olympic Committee, are presently considered “earned income abroad” and therefore subject to US federal taxation. But take a closer look and you see this for what it really is: A way for politicians to use the tax code to make it appear they are supporting deserving Olympians when they really are not. Athletes in lower tax brackets will obviously pay less.
And to be honest, a few times, as we watched Michael Phelps win another gold medal or Simone Biles defy gravity, we thought, “This athlete is going to get paid!”
One might nearly think politicians would prefer to be able to talk about the issue than settle it.
“There is no moral or economic case for exempting the earnings of Olympic athletes over other categories of workers”.
For whatever reason, all the buzz about giving Olympians a tax break during the London Olympics quickly died down after the games ended.
This year, the tax-break proposal has gotten further than it ever has before.
For competitors of modest means, the tax bite is smaller than for those with major sponsorship deals and greater net income – as with any earnings – and even a taxed bonus nets them extra cash.
U.S. Sens. John Thune (R-SD) and Chuck Schumer (D-NY) introduced companion legislation in the Senate that was approved earlier this year.
In the United States, for example, private donors have been funding a medal incentive program since 1994 to reward athletes who medal.
Congress took a break for half of July and all of August. But when they return in September, a key tax committee in the House of Representatives is expected to make the bill a top priority. It would likely apply to this year’s Olympians and Paralympians even though the games will be over.
Let’s show our Olympians our appreciation – by not taxing their hard-earned medals.
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Efforts by both our assemblywoman and senator deserve bipartisan support and will hopefully be in place when our athletes complete in the Winter Games in South Korea in 2018.
