The Olympic Tax You Might Not Know About
Posted by gonzo309 10 years, 9 months ago to Government
Dear Laissez Faire Today Reader,
The 2014 Winter Olympics wrapped up last night with great fanfare. With news stories journalists finding their hotels half finished and stray dogs being rounded up and euthanized, there were plenty of things to talk about outside the games. But what can you expect when you task a government with a job six years in advance and give them more Olympic money than any other Winter games previously.
American athletes put on an excellent showing. Overall, they collected 28 medals coming in second overall. The final breakdown for America was 9 Gold, 7 Silver, and 12 Bronze. Russia, the host country, claimed the top medal count with 33, bringing home 13 Gold medals to boot.
While the American athletes can hold their heads up high knowing they represented the country proudly, when they get back to the U.S., they should be expecting a phone call.
From the IRS.
You see, just because you've proven yourself to be amongst the best at your sport in the world, doesn't mean you're above U.S. tax law. The U.S. Olympic Committee offers all medalists a cash prize for each medal they bring home for the country. Individual sports may offer additional prizes on top of this. So winning a gold medal can earn an athlete much more than the cash equivalent of the precious metal itself.
For these last Olympics, gold, silver, and bronze medalists would receive $25,000, $15,000, and $10,000, respectively.
But the U.S. requires you to treat these cash prizes as taxable income. So depending on which tax bracket these athletes find themselves in, they could be handing over a significant portion of their winnings to Uncle Sam. IRS agents and other government apologists will no doubt say the government helped these athletes succeed, and they need to help spread the wealth around.
And the worst part is that they're taxed at whatever tax bracket these athletes are in. A gold medalist could see themselves hand over close to $10,000 to the government for all their hard work if they're in the highest tax bracket.
A handful of politicians in the government from both sides of the aisle have made noise about exempting these cash bonuses. They claim their performance in the Olympics warrants them a tax break.
They're wrong.
As nice as it would be for the government to reward these Olympians, it's not a good idea for the government to be playing favorites with the tax code. Rather, why not lower taxes for everyone and cut back on how much money the government can waste.
Don't get us wrong. We're big fans of these Olympic athletes, and think they're a great example of what people can achieve through hard work and determination. But we think the government shouldn't have the power to hand out favors whenever they want. That's just our two cents.
The 2014 Winter Olympics wrapped up last night with great fanfare. With news stories journalists finding their hotels half finished and stray dogs being rounded up and euthanized, there were plenty of things to talk about outside the games. But what can you expect when you task a government with a job six years in advance and give them more Olympic money than any other Winter games previously.
American athletes put on an excellent showing. Overall, they collected 28 medals coming in second overall. The final breakdown for America was 9 Gold, 7 Silver, and 12 Bronze. Russia, the host country, claimed the top medal count with 33, bringing home 13 Gold medals to boot.
While the American athletes can hold their heads up high knowing they represented the country proudly, when they get back to the U.S., they should be expecting a phone call.
From the IRS.
You see, just because you've proven yourself to be amongst the best at your sport in the world, doesn't mean you're above U.S. tax law. The U.S. Olympic Committee offers all medalists a cash prize for each medal they bring home for the country. Individual sports may offer additional prizes on top of this. So winning a gold medal can earn an athlete much more than the cash equivalent of the precious metal itself.
For these last Olympics, gold, silver, and bronze medalists would receive $25,000, $15,000, and $10,000, respectively.
But the U.S. requires you to treat these cash prizes as taxable income. So depending on which tax bracket these athletes find themselves in, they could be handing over a significant portion of their winnings to Uncle Sam. IRS agents and other government apologists will no doubt say the government helped these athletes succeed, and they need to help spread the wealth around.
And the worst part is that they're taxed at whatever tax bracket these athletes are in. A gold medalist could see themselves hand over close to $10,000 to the government for all their hard work if they're in the highest tax bracket.
A handful of politicians in the government from both sides of the aisle have made noise about exempting these cash bonuses. They claim their performance in the Olympics warrants them a tax break.
They're wrong.
As nice as it would be for the government to reward these Olympians, it's not a good idea for the government to be playing favorites with the tax code. Rather, why not lower taxes for everyone and cut back on how much money the government can waste.
Don't get us wrong. We're big fans of these Olympic athletes, and think they're a great example of what people can achieve through hard work and determination. But we think the government shouldn't have the power to hand out favors whenever they want. That's just our two cents.
No, I for one, am not going to call this "unfair."
The only thing unfair is a federal bureaucracy that has grown gargantuan and consumes 25% or more of all of our collective productivity. That is unfair.