Bill To Change Tax Rules On Olympic Medals Moves Through Congress

medal-tax

There has been a long-standing debate on whether Olympic athletes should be taxed on their medal earnings or not with bills circulating through Congress every quadrennial.

The most recent attempt to make Olympic athletes exempt from what is referred to as the “victory tax” was proposed by Senators John Thune (R- S.D.) and Chuck Schumer (D- N.Y.). The S.2650 bill, also known as the “United States Appreciation for Olympians and Paralympians Act,” was first proposed in March 2016 before reaching the Senate floor in mid-July where it passed without amendment by unanimous consent. The bill has experienced recent success with an approval of 415-1 from the House and will now go back to the Senate.

Currently when a U.S. Olympic athlete wins an Olympic medal they earn cash prizes from the United States Olympic Committee for the following amounts: $25,000 for gold, $15,000 for silver, and $10,000 for bronze. Since the money received is considered to be earned income, it is taxed.

While the Senate bill would make the winnings tax-free, the House bill would only allow the Olympic taxes on high-profile athletes, such as Michael Phelps, who earn more than $1 million a year. Additionally, the bill would be retroactively apply to those medals won during the 2016 Rio Olympics.

Representative Robert Dold (R- IL) explained to the Chicago Tribune that “the vast majority of Olympic and Paralympic athletes will never sign an endorsement deal or get paid millions of dollars to compete. They’re school teachers, full-time students, retail workers and more.” Dold continued on, stating “the IRS forces our Olympic and Paralympic champions to pay a penalty for their success. Our bipartisan bill ensures that these athletes can remain focused on fulfilling their Olympic and Paralympic dreams without the fear of getting a huge tax bill in the mail.”

Schumer added that athletes “should be worried about breaking world records–not breaking the bank–when they earn a medal. After a successful and hard-fought victory, it’s just not right for the U.S. to welcome these athletes home with a tax on that victory.”

The only dissenting vote within the U.S. House was from Representative Jim Himes (D- CT) who explained to The Huffington Post that “it makes an unpaid-for carve out, is most likely to benefit the richest athletes and further complicates an already complex tax code.”

This is not the first attempt at passing a bill to give Olympic athletes a tax break. Senator Mark Rubio (R- FL) introduced a bill in 2012 to “shield medals and bonuses from Uncle Sam,” which was unsuccessful.

Because the U.S. House passed an edited version of the bill from what the Senate passed in July, the Senate will now have to pass the House’s version before it would go to the President.

More about the medal tax can be found here

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Geli Glez
7 years ago

The best of the best Michael, we love you and God Bless you!

Tammy Lee
7 years ago

I think it should apply to all Olympic medalists across ths board. Michael Phelps for example shouldn’t have to pay the tax just because he’s richer than another athlete. They all had to work just as hard to earn those medals.

Mdc
Mdc
7 years ago

On related note associated with fair compensation….How come the Olympic athletes don’t get paid half the revenue generated like other pro sports? Because the IOC like the NCAA is a cartel that exploits the athletes (mostly football and basketball for the NCAA) who do the work. I hope all the athletes go on strike someday right before the olympics, March Madness and the final BCS game. They have all the leverage.

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