Rubio bill would make Olympic prize money tax-exempt
By Chris Moody, Yahoo! News | The Ticket – 3 hrs ago
Florida Sen. Marco Rubio introduced a bill Wednesday that would exempt Americans competing in the Olympic Games from paying taxes on the financial spoils of their victory.
Athletes are awarded a $25,000 honorarium for first place, $15,000 for second and $10,000 for third, but under Rubio's bill, the money would not be subject to taxes currently imposed by the Internal Revenue Service.
I don't know what the logic is here. I don't know what the logic is in deciding to pursue this ridiculous bill that affects a couple dozen Americans, rather than say, passing the JOBS Act or something, or what reasoning is behind the idea that Olympic prize money should be tax-exempt. Let's let Senator ShitForBrains explain:
"Athletes representing our nation overseas in the Olympics shouldn't have to worry about an extra tax bill waiting for them back home," Rubio said in a statement. "We can all agree that these Olympians who dedicate their lives to athletic excellence should not be punished when they achieve it."
No. No, we can not all agree. Paying taxes on your earnings is not punishment. It's the price of living in a functioning society. Why would athletes be exempt from that? And I can't imagine that any of the athletes are at all concerned with the extra tax bill waiting at home. How burdensome could the tax bill be when you've just been handed $25 grand or more for doing something that you were going to do anyway because this sport is your passion in life? If I get a bonus for being good at my job, I have to pay income tax on it. So do you, I assume. And I don't even like what I do. And any bonus I might get is not going to be anywhere near $25 thousand.
We aren't going to pretend that Olympic athletes are sacrificing for the glory of the nation or something, are we? Do you reallynot think that these young men and women are participating in these sports because they love these sports? No 10-year-old little gymnast is getting up at 3 every morning to get screamed at by Marta Karoli while damaging every sinew in her body because she wants the United States to triumph over China in sports, or whatever. They do it because they love what they do and they love being the best and they love winning. And there's nothing at all wrong with that, but are we going to make everyone who follows their passion tax-exempt?
It would have been worth all the pain and the hard work if only I didn't have to pay income tax!
Americans for Tax Reform, a group founded by conservative activist Grover Norquist, estimated that Olympic medalists face a tax burden of as much as $8,986 when they return from the competition.
Now, this may come as a shock to you, but Americans for Tax Reform is being pretty fucking dishonest about this! I know, right? I know I'm stunned.
Here's what they have to say about Olympic taxes:
American medalists face a top income tax rate of 35 percent. Under U.S. tax law, they must add the value of their Olympic medals and prizes to their taxable income. It is therefore easy to calculate the tax bite on Olympic glory.
American gold medal winners will pay the IRS up to $8,986. Silver medal winners will pay up to $5,385. Bronze medal winners will pay up to $3,502.
Read more: http://atr.org/win-olympic-gold-pay-irs-a7091#ixzz22LB8C2S9
There's even a handy little chart that I can't seem to copy here, but suffice it to say that ATR is basing their calculations on the idea that Olympic medal winners would pay 35% on their prize money. Which seems pretty unlikely, given that most of them don't have day jobs, and the 35% tax bracket only applies to income over $388,550. So, sure the basketball team will have to pay the full 35% minus whatever loopholes their army of accountants can come up with, so will Micheal Phelps, but your average Olympian amateur athlete, not really.
Single Filing Status
[Tax Rate Schedule X, Internal Revenue Code section 1(c)]
10% on taxable income from $0 to $8,700, plus
15% on taxable income over $8,700 to $35,350, plus
25% on taxable income over $35,350 to $85,650, plus
28% on taxable income over $85,650 to $178,650, plus
33% on taxable income over $178,650 to $388,350, plus
35% on taxable income over $388,350.
Now, Olympians are also apparently charged tax on the value of their medals, and that is bullshit, because they aren't really getting any income from that. They aren't going to melt down their gold medals and sell them to Glenn Beck or whoever. But the medal tax is really not a whole lot, even according to the ATR, which lists the tax on a gold medal as $236, which is still assuming a 35% tax rate.
Aaaaanyway. . .
Even Rubio can't think that this stupid piece of legislation has any chance of becoming law, so why is he wasting his time on it? Is he just trying to prove his anti-tax boner fides (see what I did there?) to Grover Norquist? Is it just that he hopes Democrats will vote against it so he can claim that they hate America's athletes? Is he just a moron? I'm going to go with all of the above.