Another Taxing Argument

A few things about this recent outrage over Olympic medal winners paying taxes on their winnings (American athletes are given prize money of $25,000 for gold, $15,000 for silver and $10,000 for bronze):

1. This is not a new tax. According to Dara Torres, while sitting in with Fox & Friends, athletes weren't given prize money for winning medals before 2000, so they weren't taxed. When they started getting paid at the 2000 Olympics, they started paying taxes on the winnings. So, this isn't a new "Obama tax".

2. The numbers cited for the taxes an athlete would pay ($8,986 for gold, $5,385 for silver and $$3,502 for bronze)  are based on the athletes earning over $388,350 a year, which would put them in the highest tax bracket (35%). That's probably not the case for most of these athletes. And, if it is, like for returning athletes who have already made millions in endorsements, paying taxes on their winnings (just like they pay taxes on their endorsement money) isn't going to cause much discomfort.

3.  The dollar amounts cited above also assume the value of the medal itself is taxed.  But, according to Mark Jones, the communications director for the U.S. Olympic Committee, there is no value to the medals and there is no tax associated with them.

4. Training and travel expenses are tax deductible, so writing off the amount of money they are taxed in their winnings won't be hard to manage.

5. Taxing Olympic winners on their prize money may seem outlandish at first blush, and it pushes our patriotic buttons, but consider this:  Our military personnel serve overseas, putting their lives on the line, and their income is taxed. If we're going to exempt Olympic athletes from paying taxes on their winnings, shouldn't we first exempt our military? And do we only exempt Olympic athletes? What about our athletes who participate in the World Games? The World Championships?  What about our golfers who play in the Ryder Cup? What games are "patriotic" enough to be worthy of exemption? Where do we stop?

I think this story is much ado about nothing, brought up to draw attention to those who want to beat their chests and claim their patriotic superiority.  If this was truly such an outrage, why no mention of it during the 2000 Games?  2004?  2008?  Might this be a politically motivated argument?

Most of these athletes are going to cash in big time for winning their medals. And, as great as that is (them winning), and as much as we all enjoy the patriotism we feel while watching our athletes succeed, I'd worry more about how we treat our military than I would these athletes.


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