All the Olympic gold medals star U.S. athletes such as Michael Phelps, Gabby Douglas and Missy Franklin rake in at the 2012 Olympics in London come with a price. But we’re not talking about the years of personal and financial sacrifice many athletes make just to earn a piece of Olympic hardware.
Like any income earned, athletes are taxed for every medal they receive, and U.S. representatives and politicians, including Los Angeles County Supervisor Michael D. Antonovich, are aiming to put an end to the Olympic tax.
American athletes who win Olympic medals receive honorariums from the U.S. Olympic Committee – $25,000 for gold, $15,000 for silver and $10,000 for bronze. Currently, the IRS treats such honorariums as income and taxes the honorariums accordingly. The Press Enterprise reported the estimated tax burden for athletes at about $9,000 for gold, $5,400 for silver and around $3,500 for bronze.
The Olympic Tax Elimination Act, introduced by U.S. Senator Marco Rubio (R-FL) and sponsored by Representatives Mary Bono Mack (R-CA) and G.K. Butterfield (R-NC) would allow athletes to enjoy their medal earnings tax-free.
As U.S. Olympic pride grows during the summer games in London, so is political support for the repeal. Antonovich, who represents Glendora, San Marino, Arcadia, Monrovia, and other San Gabriel Valley cities on the L.A. County Board of Supervisors, introduced a motion supporting federal legislation to repeal the medal tax on U.S. Olympic athletes.
“After years of sacrifice and personal expense to represent our nation at the Olympic Games, forcing a tax on winning medals is a punitive action,” said Antonovich in a press statement. “Olympic medalists should be celebrated for their extraordinary achievement — not penalized.”
The tax repeal is intended to assist the average American Olympic medal winner, those who — unlike Phelps and Douglas — won’t see huge financial gains for their athletic achievements.
While top Olympic medal winners in high-profile sports such as gymnastics, swimming and track and field may go on to lucrative marketing contracts, many American medalists will return from London with just modest earnings and the memory of their medal-winning achievements.
Even President Barack Obama is on board to repeal the Olympic tax, according to White House Press Secretary Jay Carney.
According to the Press-Enterprise, Carney told reporters at the White House on Monday:
” Well, the President believes that we should support efforts…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.”
Republican presidential candidate Mitt Romney is also supporting the exemption, according to Yahoo! News.
Senior Romney Advisor Eric Fehrnstrom told reporters Thursday that Romney was in support of a plan to eliminate taxes on Olympic medals and prize money.
But opponents say the tax exemption will only give larger tax breaks to high-profile professional athletes such as LeBron James and Kobe Bryant, who make millions of dollars each year just on endorsements alone.
A Forbes editorial argued LeBron James – who earned $57 million in endorsements last year – could receive a $8,700 tax break if he and the highly favored Team USA win gold in London.
Should taxes be eliminated on U.S. Olympic athletes’ prize money?