According to Americans for Tax Reform, a gold medal is
valued at approximately $675, resulting in a tax of $236. In addition to earning
a medal, Olympic medalists also receive cash prizes of $25,000 for earning a gold
medal, $15,000 for earning a silver medal, and $10,000 for earning a bronze
medal. This would mean that an Olympian who earned the gold medal would pay
$8,750 in Federal taxes. An Olympian who earned a silver medal would pay $5,250
in Federal taxes. Lastly, an Olympian who earned a bronze medal would pay $3,500
in Federal taxes.
Senator Rubio’s bill proposes to eliminate the tax on
Olympic medals and prize money won by athletes representing the United States
in the Olympics. However, there is a hint of unfairness to this bill because
there are several other tax codes that should also be eliminated or revised if
this bill becomes a law. For example, should individuals receiving monetary gifts
exceeding $13,000 be taxed on the gift? After all aren’t gifts supposed to be
free? And if someone is blessed to have someone leave them a large estate as an
inheritance, should they be taxed to receive it? Should athletes be taxed on
the endorsement money they receive simply because a company desired to have
them be the spokesperson for their product? Should lotto winners and gamblers pay
taxes on the money they won as a result of luck? Should U.S. Citizens earning
income abroad be taxed on that income?
When one chooses a career path, one must be
willing to accept the tax consequences that follow. For example, a doctor who saves hundreds or
perhaps even thousands of lives is not exempt from Federal taxation. A teacher
who is responsible for educating our political leaders is not exempt from Federal
taxation. An Amateur or a Professional Gambler is not exempt from Federal taxation.
Not even the President of the United States who is responsible for running the
United States is exempt from Federal taxation.
So what makes Olympic athletes any different? Surely the
athletes are not solely interested in representing their country just for the
bragging rights, there has to be some financial motivation behind it. And
should an athlete come forward and deny the financial motivation behind making the
Olympic team and winning a medal, then that athlete should not be distraught by
the tax consequences that result from winning a medal.
Now I will agree that the tax on the medal should be removed
because even if the Medal is made of real gold, silver, or bronze, it should
not be taxable unless sold by the Olympian for cash value. However, the tax on
the prize money should not be eliminated because their job is essentially to be
an athlete, and any income earned because of their athletic ability should be taxed.
There are men and women who have devoted their lives to
representing our country, and the only portion of their income that is exempt
is when they are sent to a combat zone. These men and women deserve to have
their full income exempt because they are risking their lives to protect the
lives of others. However, no amount of money can compensate for the risk
associated with working in a combat zone. Although being an athlete in the Olympics
is similar to being in a combat zone because of the battle amongst nations to
prove whose athletes are the best, the athletes are not risking their lives to
protect the lives of others.
I am very proud of our Olympians, but an Olympian winning a
medal only incites country pride and the occasional bragging rights. It does
not equate and should not be equated to the safety and peace of mind that the men
and women in our military provide. As a result, any prize money earned by an
athlete, whether it is earned from participating in the Olympics or not, should
be taxed. Taxation is the consequence of earning income both in the United
States and abroad, and Olympic athletes should not be exempt.
