It seems the U.S. Internal Revenue Service has its greedy eyes on every winning American athlete in London. That’s because:
- a gold medal, worth about $650 at current gold prices, could cost athletes about $236 in taxes,
- while a bronze medal, which is worth $5, could only cost an athlete $2 in taxes.
As of this morning, U.S. athletes have won 30 gold, 19 silver and 22 bronze medals, for a total of 71, just behind China with 74 and ahead of the host United Kingdom with 48.
The real bite, however, is not medals, but the taxes to be taken out of Olympians' cash bonuses. The U.S. Olympic Organizing Committee awards 2012 U.S. champions:
- $25,000 for a gold medal,
- $15,000 for a silver and
- $10,000 for a bronze.
For example, Allison Schmitt swam a sizzling final leg to lead the U.S. to a gold medal in the 4x200 freestyle relay. Congratulations, Allison. You now owe the IRS $26,679. Michael Phelps, with his stunning performance, owes somewhere in the range of $45,000 for his 2012 victories.
At a 35% income tax rate, for each medal, bronze medalists will owe the IRS a total of $3,500, silver medalists will owe $5,250 and top finishers will be liable for $8,750, according to calculations by Americans for Tax Reform.
U.S. athletes are effectively being punished for their success, argues Florida Senator Marco Rubio, who introduced a bill earlier this week that would eliminate tax on Olympic medals and prize money. (President Obama agreed with him!) Rubio said this tax is another example of the “madness” of the U.S. tax system, which he called a “complicated and burdensome mess.”
No argument from us, senator. We’ve been saying that for years.