What’s the first thing our Olympic medalists will receive when they return from Rio? A tax notice from the IRS. True to form, the federal tax collectors will punish Olympic victory as much as they punish business success. Athletes are subjected to a punitive progressive tax scheme that will take as much as 36% of the champions’ rewards. U.S. Olympians are subjected to a federal excise tax that taxes not only honorariums from the International Olympic Committee, ranging from $25,000 for gold medalists and lower amounts for silver and bronze, but also on the value of the gold and silver actually in the Olympic medals themselves.
Those of use who defend free-market capitalism always talk about how the federal tax code punishes people more the more they succeed, but this is one of the clearest examples one could cite. Gold medalists will get an approximately $8,986 tax bill, while silver medalists will be taxed $5,385, and the bronze $3,502. Literally the better race one runs or swims, the more they get to pay Uncle Sam who had nothing to do with the success of an athletes’ Olympic Games. It’s utter madness.
Senator Marco Rubio of Florida sees this as a teachable moment and has introduced legislation that would repeal the Olympic excise tax for all U.S. competitors. Senator Rubio stated that “our tax code is a complicated mess that too often punishes success, and the tax imposed on Olympic medal winners is a classic example of this madness.” I couldn’t have said it any better myself! Any tax provision that punishes success is counterproductive and should be repealed, not just on Olympians but on all Americans.
Taxing success is enough in the daily marketplace to entice some Americans to settle for silver when they should go for gold. Killing that incentive isn’t just bad for the individual, but for our society as a whole. When we all go for gold, our country is more promising and prosperous for everyone.