U.S. Senator Marco Rubio wants the IRS to stay out of the pockets of our Olympic athletes. Rubio, rumored to be on former Gov. Mitt Romney‘s short list for vice president on the GOP ticket, has introduced legislation that would end federal income taxes on Olympic medals.
As The Inquisitr has previously reported, Olympic medalists have to fork over to the taxman nearly $9,000 for each gold medal, about $5,000 for a silver, and $3,500 for a bronze primarily based on the prize money (“honorariums”) they earn for each win. The value of the gold medal by itself is only about $675 at current commodity prices.
For athletes such as Michael Phelps who compete in high-profile events and can expect a lot of lucrative endorsement deals, or rich NBA players on the so-called Dream Team, the additional tax is probably a drop in the bucket. But for Olympians in lesser-known, one-and-done events, the tax bite could be huge.
Rubio’s bill, The Olympic Tax Elimination Act, would amend the Internal Revenue Code to give a tax break to successful Olympic athletes. It would completely eliminate the tax on Olympic medals and prize money won by U.S. athletes. A similar bill has been submitted by Republicans in the House of Representatives.
The Florida Republican senator provided this commentary on his bill to end tax collections on Olympic medals:
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. Athletes representing our nation overseas in the Olympics shouldn’t have to worry about an extra tax bill waiting for them back home.
We need a fundamental overhaul of our tax code, but we shouldn’t wait any time we have a chance to aggressively fix ridiculous tax laws like this tax on Olympians’ medals and prize money. We can all agree that these Olympians who dedicate their lives to athletic excellence should not be punished when they achieve it.
If the Marco Rubio bill to end taxes on Olympic medals is enacted into law, the gross income of Olympic athletes “shall not include the value of any prize or award won by the taxpayer in athletic competition in the Olympic Games.” This proposed law would apply to prizes and awards received after December 31, 2011, so it would cover the 2012 London Olympics.
Taxing Olympic medals is unprecedented around the world, according to American for Tax Reform, the organization that originally broke the story about how much the athletes have to pay the IRS for winning medals.
It gets even worse. Not only do our Olympic athletes have to pay taxes on their medals and prizes – chances are their competitors on the field will face no such taxation when they get home. Because the U.S. is virtually the only developed nation that taxes “worldwide” income earned overseas by its taxpayers, our Olympic athletes face a competitive disadvantage that has nothing to do with sports.
Do you think it is fair for the IRS to go after Olympic medalists?