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Fla. Sen. Rubio introduces bill to make Olympic prizes tax-exempt
(L-R) US swimmers Conor Dwyer, Michael Phelps, Ryan Lochte, Ricky Berens poses on the podium with their gold medals after winning the men's 4x200m freestyle relay final during the swimming event at the London 2012 Olympic Games on July 31, 2012 in London. / FABRICE COFFRINI
Updated 12:30 p.m. ET
(CBS News) Winning an Olympic medal may be priceless to an athlete and his or her fans, but not to the IRS.
Florida Sen. Marco Rubio introduced a bill Wednesday that would make the medals and prize money awarded to U.S. athletes at the London games - they get thousands of dollars in addition to the medals - exempt from taxes.
In a statement, the Tea Party-backed Florida senator blamed the tax rule on a "complicated and burdensome mess" of a system "that too often punishes success."
Sen. Marco Rubio, R-Fla., center, gestures during a news conference on Capitol Hill in Washington, Wednesday, Feb. 8, 2012.
/ AP Photo/J. Scott Applewhite"Athletes representing our nation overseas in the Olympics shouldn't have to worry about an extra tax bill waiting for them back at home," Rubio said in a statement about the Olympic Tax Elimination Act on Wednesday.
Any money that Olympians receive for winning gold, silver or bronze on behalf of the United States in London gets taxed up to 35 percent, according to research done by the Americans for Tax Reform.
The U.S. Olympic Committee, a non-profit based in Colorado Springs, awards $25,000 to gold medal award winners, $15,000 to silver medalists and $10,000 who earn bronze in a program they call Operation Gold.
The 35-percent tax rate applies to both the prize money and the raw value of the medal itself. Americans for Tax reform calculates that according to today's commodity prices, the value of a gold medal is about $675, silver is worth $385 and a bronze medal is worth under $5.
That means that the U.S. women's gymnastics team, for example, could be paying back up to $8,986 tax on the $25,000 they get on each of their gold medals. So would swimmers Conor Dwyer, Michael Phelps, Ryan Lochte, Ricky Berens for winning the 4x200m freestyle relay final. Silver medalists have a $5,385 tax burden; athletes on the third tier of the stage will be coughing back $350.
How much are Olympic medals actually worth?
The ATR, which opposes tax increases "as a matter of principle," adds that because the U.S. is one of few countries who tax on income earned overseas by its taxpayers, winners from most other countries won't be paying taxes on their prizes.
Politifact points out, however, that athletes can reduce the tax hit by deducting any unreimbursed business expenses (traveling, equipment, etc.) from their bonus. Additionally, the 35 percent tax rate applies to athletes who make at least $380,000 a year.
USOC said that athletes can receive additional rewards from non-governmental bodies, but the organization does not track those.
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which has been a part of the us tax code since the 1986 overhaul.
now, unlike his counterparts in the house, this is the first olympic games that Rubio has been in the senate for and have a chance to introduce a bill to allow these 'honorariums' form the USOC to become tax-free. but since 1986, these fall under the 'prizes and gifts' that became taxable as a part of gross income.
I can't get on Rubio's case as an ambulance chaser on this issue, unlike the house types who ave been in office fo years but did nothing about this 'issue' until they could try and gain political points.
Rubio just went down a notch in my books. This is just more favoritism. A B.S. trick the democrats do. The income tax on medals, explicitly shows everyone the truly unfair nature of the income tax. Rubio should be proposing a bill to eliminate the income tax altogether or to make all income treated equally. He doesn't get true conservatism and true fairness.
This could be a rookie mistake, but a big one in my book.
Olympic Medal Bill is Just a Humorous Diversion to Hide Real Tax Reform Deal
Each year the government gives away $1.1 trillion through tax expenditures and most of the money goes to people who do not really need the help. There is only one tax plan designed to eliminate all loopholes and revive the economy in the process. It measures wealth and economic need. In 1995 half of America shared only 3.6% of the wealth. By 2010 this share was only 1.1% for a wealth gap not seen since the Great Depression of 1929.
The 2-4-8 Tax Blend lowers income tax rates to 8% by eliminating tax expenditures and replacing job killing payroll taxes with a net 2% wealth tax (excluding $15,000 cash and retirement funds). Businesses would pay the same 8% income tax rate and a 4% VAT.
Congressional representatives have been discouraged from speaking publically about the plan before the election because it is strictly a nonpartisan plan which will actually fix the economy, Social Security and Medicare without government spending. Members who have pledged to fix the economy or die trying say the reforms also comply with ATR's bipartisan no-tax pledge. Rich, poor, Muslims, Latinos, gays, big oil companies, small manufactures, Democrats, homeowners, S corporations, women, farmers, Olympic medal winners and Catholics would all be taxed with the same very low rates.
Enjoy the rest of your day.
www.TaxNetWealth.com
Shame on you Marco Rubio.
Or at least up to a certain point.
Phelps has gotten enough medals over the years, and made enough money from sponsorships as a result, that I don't have any problem with him paying income taxes on his medals. I've no doubt that he's earned the cost of his training many times over.
However, then you look at somebody like Gabby Douglas. Her mother is a single mom, with three kids. It can easily cost a quarter of a million dollars to train an Olympic-level gymnast. And that doesn't include things like her air-fare to all of the necessary meets before she qualifies for the Olympics. $25,000 for a gold medal hardly makes a dent in that.
And since the cost of getting to the Olympics happens over many years, you can't write off the cost against the winnings. (Like you can with lottery ticket purchases against any winnings.)
..."an extra tax bill waiting for them"... ??? What is an "extra tax bill" ??? The article says that the money in question is a gift from the U.S. Olympic committee. Because the money "appears" to change hands in London it should be tax free??? ...Olympic Fever, no doubt.
You seemed to have missed the point. Rubio wants to MAKE these "gifts" (awards if you will) from the U.S. Olympic Committee, tax exempt. That is what is at debate here.