As much as I love the Olympics, I apparently don’t love them as much as Sen. Marco Rubio (R-FL). He announced yesterday that he was introducing the Olympic Tax Elimination Act which is intended to exempt U.S. Olympic medal winners from paying taxes on their medals.
As I’ve noted before, U.S. Olympians get paid for their medals: $25,000 for gold, $15,000 for silver and $10,000 for bronze (though we don’t pay as much as many other countries). Additionally, many of the U.S. Olympians earn appearance fees from sponsors; Phelps, for example, earned $1 million in Beijing for breaking Spitz’ record (you can see more about the highest-earning Olympians here).
Taxes have already come under scrutiny at the Olympics. This year, under pressure from the athletes, the U.K. provided a temporary exemption for Olympians so that they would not be subject to U.K. income tax.
In the U.S., however, those athletes would still be subject to tax since they’re taxed on their worldwide income. That means that income earned anywhere in the world – including at the Olympics – would be subject to federal income tax reporting for U.S. citizens and residents.
Rubio doesn’t think that’s fair. He said, in a press release:
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.
But Rubio didn’t quite dream up this idea on his own. He was “inspired” by the head of Americans for Tax Reform, Grover Norquist (insert your favorite George H.W. Bush “Who the hell is Grover Norquist anyway?” joke here).
Rubio tied his proposal to the need for “a fundamental overhaul of our tax code” while saying that “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.” Which is why he proposed this so timely, right? Like right in the middle of the Olympics that we’ve known about for, say, four years? It just snuck up on us, I guess.
As for Rubio? Since we’re so fixated on records this week, what’s his record so far? Twenty-six bills introduced in the Senate, none passed.
So what are the chances of the bill succeeding? I’m not sure. Americans sure love our Olympics – and we hate taxes just as much – but not every one is on board with the idea. Rubio has said, about the proposal, “We can all agree that these Olympians who dedicate their lives to athletic excellence should not be punished when they achieve it.”
I think we all agree that Olympians should not be punished for achieving their goals. But exempt them from tax? I don’t know. We don’t exempt other prize winners in their fields, such as Nobel, Pulitzer and Oscar winners (with some limited exceptions). Should we make an exception for Olympic athletes? What do you think?
Article originally published on Forbes.com by Kelly Phillips Erb - 08/02/2012
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