Sometimes, when I stand up and wave Ol’ Glory while Lee Greenwood sings what might as well be the national anthem, I find myself wishing someone in this country would step up for what’s right. If it were me, I’d start with the tax code, which is super broken. Here’s today’s example: taxing Olympians.
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Sure, being an athlete is–in some cases–an Olympian’s job. But I still think the government should back off of taxing them for winning. Just think of how much Michael Phelps has paid out over the years. It is staggering. As he is now the most highly decorated Olympian in history, he’s also become the most highly taxed.
Americans for Tax Reform labeled this taxation “backward” in 2014: “The only thing colder than the slopes at Sochi is the fact that any prizes awarded by the USOC will be taxed. The U.S. has officially ‘earned the gold’ for having one of the most backward and illogical tax codes in the world.”
Michael Phelps has won 23 gold medals — 28 medals total. There is some prize money associated with the winnings, too. $25,000 for a gold, $15,000 for a silver, and $10,000 for bronze. Phelps’ Olympic winnings total $640,000.
That chunk of change was taxed. I guess, if I had to, I could accept that. Game show winner, professional athletes, Olympians–what’s the difference? But the weight of the medals is taxed, too. Phelps paid an additional $13,887 for bringing home the medals themselves.
The actual taxes athletes pay depends on their annual earnings, which place them in their respective brackets. Phelps, who earns a ton in endorsements, is shelling out a lot in taxes–perhaps as high as 39.6%.
That means he would be paying $9,900 for winning each gold medal, $5,940 for winning a silver, and $3,960 for each bronze. I wonder if he’s ever tempted to slow down in that last lap?
There are some sane politicians who want to curtail this practice. Texas Rep. Blake Farenthold re-introduced the TEAM Act (“Tax Exemptions for American Medalists”) back in 2014. “This needless tax,” Farenthold said, “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.”
That said, another Olympics is almost behind us, and a slew of Americans will be ponying up because they won for their country.