Olympic medal winners taxed up to 39.6 PER CENT on prize money
- The U.S. Olympic Committee awards $25,000 for a gold medal, $15,000 for silver and $10,000 for bronze
- The United States is one of the few countries that taxes money earned outside its borders, at rates as high as 39.6 per cent
- The Olympic medal tax also applies to the value of the base metal in each medal – and gold is currently trading at $1,260 per ounce
- Athletes who excel in Sochi will have to treat their prize money as though it were earned in the U.S., even though they'll be competing in Russia
- House Republicans have a bill that would exempt Olympic athletes from taxes on their medal bonuses, and the White House has expressed support
By David Martosko, U.s. Political Editor
PUBLISHED: 12:47 EST, 7 February 2014 | UPDATED: 14:26 EST, 7 February 2014
The White House doesn't like it, and neither does a prominent Senate Republican, but Olympic athletes who win medals in Sochi will have to pay federal income taxes on their cash bonuses.
The U.S. Olympic Committee awards $25,000 for each gold medal, $15,000 for silver and $10,000 for bronze. But top athletes who are in the top income tax bracket , 39.6 per cent, will have to fork over as much as $9,900 of a gold medal payout.
Competitors in Sochi, Russia will be able to deduct their expenses that aren't covered by the Olympic Committee or their others sponsors, but there may be additional taxes levied by states and cities on top of what Uncle Sam takes.
And adding insult to injury, any precious metals in their medals will also be taxed. The Sochi gold medals will be worth $566, and contain mostly silver.
The could drive the total federal tax liability for a gold medal winner north of $10,000.
All hail the Olympic taxpayers! Any valuable Americans win in Sochi, and the cash bonuses that come with them, will be subject to hefty federal income taxes
Magic: The Sochi Winter Olympics are underway, and as the u.S. medal count rises, so will Uncle Sam's take of the proceeds
In 2012 Florida Senator Marco Rubio introduced legislation that would exempt Olympic athletes from paying income taxes on their bonuses. The White House said at the time that President Obama supported the measure.
'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,' said Rubio when he introduced the Olympic Tax Elimination Act.
'Athletes representing our nation overseas in the Olympics shouldn’t have to worry about an extra tax bill waiting for them back home.'
A Rubio spokesman told MailOnline that the Republican lawmaker hasn't reintroduced the bill since the end of the last Congress.
But some House Republicans, led by Texas Rep. Blake Fahrenthold, have launched a similar effort, he said, and 'we’re seeing how the effort proceeds in that chamber.'
Fahrenthold filed his bill on Wednesday, saying that 'this needless tax illustrates how complicated and burdensome our tax code has become. We need a fairer system for all, and eliminating this unnecessary tax burden on our athletes is a good way to start.'
White House Press Secretary Jay Carney signaled the president's enthusiasm for Rubio's measure in August 2012 when a reporter asked about it.
'The president believes that we should support efforts – like, I think, the bill you’re referencing – to ensure that we are doing everything we can to honor and support our Olympic athletes who have volunteered to represent our nation at the Olympic Games. So he supports that bill. If it were to get to his desk, he would support it.'
Smile: You're not American: British cyclists won gold in London, but they'd be faced with a big tax bill if they were part of Team USA
Not that kind of ring, so no new taxes: The presentation of the Olympic rings was part of the opening ceremony in Sochi, Russia on Friday -- but the fifth ring failed to light up
Americans for Tax Reform, an anti-tax crusader group in Washington led by conservative firebrand Grover Norquist, publicized the Olympic medal taxes on Friday with the suggestion that the U.S. should stop taxing all money earned overseas.
'Because the U.S. is one of only a handful of developed countries that tax income earned abroad, it is likely America's competitors will not be subject to such a tax,' the group said in a statement.'
'Taken together – the tax on Olympic athletes and the tax on income earned abroad – it can be said the U.S. has officially "earned the Gold" for having one of the most backwards and illogical tax codes in the world.'
The nonpartisan Tax Foundation agrees the the U.S. should adopt a so-called 'territorial' tax system that would allow Americans to bring their overseas earnings back home without fear of hefty taxes. Much of that income has already been taxed in the countries where it was earned.
'There is no reason to privilege the winnings of American Olympians over the income earned by any other hardworking citizen,' the group said.
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