By Michael Schaus
Tuesday, February 11, 2014
So far in the Sochi Olympics, America is falling behind
in the medal count. But, financially speaking, that might not be so bad for our
proud Olympians. Unlike many of our competitors in the 2014 Winter Olympics,
the United States taxes athletes on their success at the World Games. In fact,
a gold medal performance in Sochi will cost an American athlete an IRS tax bill
just short of ten thousand dollars.
Congratulations on your gold medal! Now where’s Uncle
Sam’s money?
Because the United States taxes citizens on income they
earn while abroad, the privilege of winning a spot on an Olympic podium will
cost our Olympic heroes a hefty price tag. And, let’s face it: Nothing says
“we’re proud of you” like asking for a little redistribution of wealth. In an
effort to help illustrate the absurdity of America’s fascination with taxing
the success of individuals, Americans for Tax Reform broke down the numbers.
Being named the world champion in Sochi earns an Olympian
one $25,000 paycheck. Second place earns $15,000. And $10,000 is awarded to
each bronze medal winner. When combined with the athlete’s yearly annual
income, most (if not all) US Olympians will be paying 39.6 percent on their
haul from Mother Russia. After all, Gold medalists will be the beneficiaries of
speaking engagements, endorsements, and further income yielding opportunities,
which will push those lucky men and women into the highest US tax bracket.
(America: The land where success comes with an IRS sponsored price tag.)
That means our friendly neighborhood IRS collects $9,900
for every gold medal awarded to an American in the Winter Olympics. Heck, even
the Russian athletes (who may be taxed because the games are occurring on their
native soil) only face a top tax rate of 13 percent, according to the Swiss
firm KPMG. And all those socialist European countries? Well, most of them elect
not to tax income earned abroad, so their Olympians will enjoy a nice tax-free
income while competing in Sochi, Russia.
Thankfully, as of yet, the IRS has not figured out how to
directly tax the precious metals that make up the individual medals. (By the
way, it turns out that gold medals are often made primarily from silver… How’s
that for irony? At least that will bring down their tax liability when the IRS
finally elects to tax the trophies from conquered events.)
Oh… And let’s not forget about state taxes. You wouldn’t
want those local governments to miss out on the years of training, dedication,
and hard work that Olympians have invested in themselves and their sport. After
all, if Uncle Sam gets a slice of team America’s success, states with income
taxes are sure to request their share as well.
Of course, on the other hand, why should world champions
be treated differently than any other American? Compliance with an increasingly
tangled web of taxation and regulation, it would seem, is the price paid for
achieving dreams as an American citizen…
So, I guess we should say “God bless America, and her
Olympic athletes”… Because the same cannot be said about the IRS, or our
confiscatory tax code.
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