President Obama signed into law Monday a bill that prevents the IRS from collecting income taxes on monetary prizes awarded by the United States Olympic Committee to athletes that have won Olympic medals—what had been referred to as the victory tax.
The USOC currently awards a $25,000 bonus to American athletes that win gold as well as $15,000 for silver medals and $10,000 for bronze. Under the new law, that money cannot be considered taxable income unless the athlete has an annual income of greater than $1 million (such as Michael Phelps).
The Senate previously approved the bill in late September on the same day the U.S. Olympic and Paralympic teams visited Obama, First Lady Michelle Obama and Vice President Joe Biden at the White House.
Read more on Obama signing the bill from the Associated Press by clicking here.
I do not think we should be paying anything to athletes that make more than $100,000 (a previous four years average) for winning medals. The million dollar mark exposes a problem. In other words, well paid professionals do not need government rewards. The majority of people do not even seem to care about the Olympics. If the Olympics was limited to a select few core sports, I would change my mind. There are too many changing and almost obscure events (for most people) that I do not think the government should be spending as much as it does. Rewards can come directly from associations related to specific sports.
So, some kinds of income are more equal than others and are therefore not taxed. Animal Farm is supposed to be a cautionary tale, not an instruction manual.