Olympic Medal Winners: To Tax or Not to Tax?

by at . Comments

Winning an Olympic medal. It can be taxing.

And we're not talking about the hard work and stress that comes along with competing against the world's top athletes.

We're talking about the actual U.S. tax code, which applies to champions such as Gabby Douglas, Michael Phelps and Missy Franklin because they earn "honorariums" for finishing first, second or third in each event ($25,000, $15,000 and $10,000, respectively).

According to The Weekly Standard, the estimated taxable income on a Gold is $8,986, a Silver is $5,385 and a Bronze is $3,500.

Gabby Douglas Hair

For multi-millionaires such as Phelps - who has already pocketed well into the seven figures via endorsements and who likely be showing in commercials more often than Peyton Manning over the next couple months - the tax is pocket change.

But for Franklin, a 17-year old yet to turn pro, she could have a far more difficult time paying what should amount to thousands in taxable income.

Is there a solution? Florida senator Marco Rubio believes so, saying late last week: "Our tax code is a complicated and burdensome mess that too often punishes success, and the tax imposed on Olympic medal winners is a classic example of this madness."

Do you agree? Should Olympic athletes be exempt from paying taxes in this scenario?

 

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I can see both sides, but athletes are taxed, any casino wins are taxed, paychecks are taxed. Most get big bucks from sponsors/commercial spots after they win. However I personally would not mind if they stopped taxing them. I do think its funny Rubio wants to take this on now. Perfect timing when we are talking about Bush tax cuts that even pres. Bush but a time limit on. And im tired of hearing how taxes punish people, why is that only noted on a bigger scale? I dont see repubs saying regular workers shouldnt pay taxes or S.S. checks shouldnt be taxed which in my opinion is really taxed twice. Once when you were working and the money got taken out for S.S. and then again when you get it decades later in the form of a S.S. CHECK. And before anyone says the tax scale is different for larger wages, I know that but when you do the math the same loss is accounted to every pay scale.

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These prizes are treated like regular income and you pay a rate on it just like on any income. If you don't bring in much money, your rate is low. If you're a kid and dependent on your parents, there's probably NO tax bill. Rubio's legislation is a solution in search of a problem. And the Hollywood Gossip should have done their homework.

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Rubio and Republicans want to do away with this tax. Democrats won't do it and they dont want to extend the bush tax cuts either.