(CNN) – When the U.S. Olympic team add to its medal count, it’s not just the fans and Olympians who celebrate. So does the IRS.
That’s because the U.S. Olympic Committee awards each medalist with a cash prize - $25,000 for gold, $15,000 for silver, and $10,000 for bronze - money that the U.S. government has always considered taxable income.
That could amount to a hefty tax bill for some Olympians, especially America’s most prominent stars who have already collected multiple medals in London. For example, Michael Phelps has earned four gold medals and two silvers, amounting to $130,000 in accompanying cash prizes. That translates to nearly $46,000 in taxes owed by Phelps, assuming his income is taxed at 35 percent – the highest income tax bracket.
Moreover, some individual athletic associations pay their athletes even more per medal, like USA Cycling which shells out $100,000 for a gold medal.
But the White House on Monday said President Obama favors a proposed bill that would keep Uncle Sam’s hands off Olympic earnings.
"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," White House Press Secretary Jay Carney told reporters.
Carney was specifically referencing legislation proposed by Florida Republican Sen. Marco Rubio that would exempt the cash awards associated with Olympic medals.
“We need a fundamental overhaul of our tax code, but we shouldn’t wait any time we have a chance to aggressively fix ridiculous tax laws like this tax on Olympians’ medals and prize money,” Rubio said in a statement announcing the so-called Olympic Tax Elimination Act. “We can all agree that these Olympians who dedicate their lives to athletic excellence should not be punished when they achieve it.”
The 1-page bill only references cash prizes associated with medal wins, not the corporate sponsorships that can be worth millions of dollars for USA’s most prominent Olympians.
It’s currently unclear when and if the proposal will be put to a vote. Congress just adjourned for its five-week August recess and cutting Olympians’ tax bill may not be a high priority come the fall.
But won't these athletes recoup their tax losses when they start getting fat checks for product endorsements: "Even before Phelps won his 19th medal, his previous 18 were earning him a nice living: Forbes magazine says his endorsements for Speedo, Visa, Under Armour and others pay him $7 million a year
I've been paying taxes on my income since I got my first paycheck. This is not news, it's class warfare propaganda.
If we make an exemption for these Athletes we open the door to lottery winnings etc. If you get a bonus at work that is taxed or a special award for years of service that is monetary that is also taxed. We all pay taxes for the monies we receive, athletes that make millions off of endorsements shouldn't be treated any differently.
The metals should go to the US Government not the Athletes. They didn't get there with out our help....
In fact.., ALL the metals should go to the US Government. It's time the world paid their fair share for the 75 yrs of relative peace the US Government gave us.
to demwit: did you know most olympians are broke? olympians need this break. aspiring olympians shell out a lot their own money to become olympians and endorsements will only payoff if you win medals on popular sports like swimming and gymnastics, otherwise no reward money at all except for the bonus the US olympic committee gives.
Not all Olympians get great endorsement deals. Take Katie Ledecky and 800m freestyle gold. Do you really think she's going to have a fat endorsement deal waiting for her?
So, it's NOT OKAY with you that NASCAR gets tax subsides, either??
The Olympics are a world competition. Our medal winners are representing the USA and are basically national heroes. They help establish National pride. Nobody else in the world gives a damn about nascar. They prefer formula 1.
Well, somebody cares about NASCAR 'cause they get taxpayer subsides-Howcome??
The people who compete in the Olympics don't have help, on the most part, to get through the costs of committing themselves to lessons, training, coaches, and then we expect them to wave the flag of the American people like we stuck it out with them all along cost wise.
Only the Superstar famous competitors have sponsers with big bucks.
I'm inspired by our atheletes. They are an inspiration to our young people. An example of what you can do when you strive for something.
Thank you Olympians – You All Have Made Us SO PROUD!!
Not all medal winners get endorsements. Don't discriminate. Tax breaks for all or none. Given that these 'kids' have worked hard most of their lives to excel, I think giving them a 'pass' on taxes for their medals is appropriate.
IMHO we should stop trying to justify more tax exclusions. Let the athlete pay their fair share just like everyone else. If a US serviceman pays taxes on his/her military paycheck then an olympic athlete should too. The serviceman sacrifice is above and beyond anything these athletes can comprehend. These are cash rewards...so tax them. I do not think the medals themselves should be taxed.
This author knows nothing about taxes. In order for Phelps to be taxed at 35% on his award money, he would have had to already made at least $388,350. That is how progressive taxes work. There is a reason that only half of Americans pay taxes but more than 80% work.
At $25K per gold, that's $450,000 in gold medals already. That puts him into the upper tax bracket and makes him a 1% 'er :)
If they can get a tax break on awards they work for, could I get a tax break for being excellent at the custodial arts (chapelle style)? If there were awards for scrubbing or mopping maybe I would get a gold medal. It is cool that they represent the United States in the Olympics but many people are upset with how sports dominate many university campuses but now we demand olympians make thousands of dollas tax free. NFL players are millionaires too. Set the example, consider it income. They are working for the gold, they earn an income. Why not pay it as income tax?
You will under Obama's Tax Plan......By the way, the 'Custodial Arts' are underappreciated AND USUALLY under paid. I for one appreciated those who work in the 'Custodial Arts'...Keep up the good work!
SIN-D-FROM-HELL loves the custodial folks who follow her in parades with shovels and buckets ... apparently she provides a lot of full time jobs for a lot of people.
A small mistake in the article. While it is true that the top tax rate is 35%, we have a progressive rate. Therefore, not all of the money is taxed at the highest rate. The full 35 percent rate (known as the marginal rate) only kicks in on annual income earned after you pass a threshold of about $380,000. Below that level, income is taxed at lower tax rates.
I dedicated my whole LIFE to getting a high quality education and college degrees, so why isn't MY income getting a tax exemption. Not taxing this money is the stupidest thing I have heard the pandering weenies come up with. ARe thet kidding? Could Congress please stop giving away tax breaks, it is not like we can afford it.
So if I work my tail off and finally have a good year in business that's bad but if I do it on a track somewhere that produces nothing, that's good. I don't get it.
People like Michael Phelps and Gabby Douglas will make so much money off of endorsements that they can afford these taxes. However, what about a rower in the woman's eight? Or the gold-medal winning skeet-shooter? One of the silver medal-winning archers? Athletes in less high-profile sports don't make much money, if any, off of endorsements, nor are they professional athletes in their event...I think this is great, hopefully it passes swiftly.
Hey! If I get a $10K bonus, I'm taxed. Why should one individual get a tax break? There is no "tax loss"...you make money, you pay tax. Exempt one, exempt all. We are not taxing their medal, only the cash.
This is pandering at its worst. No more tax breaks–for anyone.
The medals certainly shouldn't be taxed, I don't understand that at all, sounds like something Pelosi created.
Are you people that blind? Believe everything you hear? If i told you the White House was on fire...would you believe it? Point is-This "government" aka Global Terrorists that run this country, are always looking for more efficient ways (for now) to kill the economy, and steal all the cash along with it. Well the cash they have, cash you dont have because they stole it all and still are. Anyone tell me why the Federal Reserve has never been audited? Stop being fools and join the pack and join the war against the Obama regime and the rest of this god forsaken government. The longer we wait, the more in deep they are gonna get us, and could care less because they have that nice underground bumper while we are all in FEMA camps being tortured. The ID Chip is the first sign of whats to come. Why else would we be trying to steal the oil supply from china to Israel?? And i quote from the Russian PM- "We will not tolerate theft during a regime change to other countries...." Hmmm Regime change...I think this guy just gave us the answer! We are stealing oil because we are to "broke" to pay off our "debts", so lets steal the oil and depopulate people in this country as well as other countries...Really??? Your cash and life is in their hands! DONT BE BLIND DONT BE A TYRANT TO THIS GOVERNMENT! OBAMA IS THE PUPPET THATS GOING TO AND IS START TO LEAD US ALL INTO WW3, AND YET ANOTHER DEPRESSIVE TIME FOR THIS COUNTRY!! WAKE UP PEOPLE!!
Right on brother. Another reason to blame Obama. Why is it that all the negative hings that have happened to the poor US citizen have happened on Obama's watch? The article states "money that the U.S. government has always considered taxable income" clearly seems to say, as soon as Obama took office and had a Democrat majority in the House, he (Obama) clearly added that when the 2012 Olympics are to be held since all the athletes in training had supported McCain, the IRS was to tax all the medalists to the full extent of the law. Or, do you not have a clear understanding of the definition of the word, "always"? Sorry, it is definitely Obama's fault. (Every bit of sarcasm I can muster I give to your comments.)
@RONPAUL – The crass ignorance displayed in your post would be laughable – if you weren't so serious. Obama has not added ANY more Federal control over you during his term. If you want to talk control, look up the Patriot Act. We can thank the Repugs for that.
Ron Paul is a weenie. He has some good ideas, but he has some out there ones too. Some of his supporters are just people who are tired of the two party system. Like, Teddy Roosevelt was 100 yrs ago when he left the Republican Party and started the Progressive Party. Which, by the way, has had MORE VOTES and SUPPORTERS of any other Independent Candidate in U.S. History. His supporters believed, just like Pauls do today that, the nomination had been stolen by the 'Conservative Power Brokers'.....sound familiar??
Sopporters saw it as defending the legacy of Abramham Lincoln AGAINST THE BIG BUSINESS ESTABLISHMENT that had taken over the Repulican Party after the civil war.......sound familiar??
Ron Paul couldn't hold a candle to Teddy Roosevelt. He would never be able to keep up. Teddy had a presence that filled the room....Ron Paul can't even fill-out his own suits.
@The REAL Truth...
Pot calling the kettle black, another blind sheep.... Have YOU heard of the NDAA bill Obama signed into effect on NY's eve 2011... The one HE INSISTED included Indefinite detention of US citizens(that congress had purposely stricken out, yep you can find it on youtube), no trial, judge or jury. Or how about Fast & Furious, started in 2009 under Obama. Don't be blinded by main stream media, but then again, what can we expect from uneducated Obama sheeple. The biggest issue you have with Ron Paul supporters is that we're actually educated in depth, SELF educated as opposed to the likes of you who just sit in front of CNN and believe whatever they tell you. YOU better wake up, FAST. Or you'll be on the fast track to your nearest FEMA camp, oh yeah, the ones that Obama & Co. recently said to start activating and asking for bids to Gov't companies to help with all the requirements to get them up & running immediately, did ya know that?? Google KBR documents Fema camps or just go right to the doc itself: http://www.aptac-us.org/new/upload/File/RFI%20for%20KBR%2011-16-11.pdf
OK then, prizes should not be taxed. Oh wait, only their prizes? How about a prize fighter? How about some poor slob on a game show? This is political, plain and simple. Brought up by a Repug knowing it would be too hot for anyone to speak against due to all the nationalistis chest pounding going on with the Olympics. Grotesque!
No wonder it costs so much to be involved in the Olympics from TV to corporate sponsorships costs to the host city. Why are any getting cash? I thought that their bills were covered without giving tax holidays to people making 5-6 times the national average income.
We don't need any more special tax exemptions on the books.
Just watch; some of these will find a way to turn the tax exempt funds into a 100 million dollar IRA.
I'd argue that Olympian's earnings should be taxed. Sure, they made our country look good and now they're getting a bonus for it, even if they pay taxes on this bonus, they still come out on top. Besides, despite making the country look good they don't actually improve our standard of living. What about the scientists, engineers, doctors, teachers, firefighters, soldiers, and police officers who might get bonuses for inventing things that make our lives better, saving lives, and training the next generation? To say nothing of entrepreneurs who create new jobs, nor any other worker in any other industry who makes America a better place. If you're going to free Olympians from taxes just for making our country look good, then you should free at least everyone who does more substantial work to improve the country.
Once he's sure something is popular, Obama always finds a way to associate himself and exploit it.
@Howard Larry Moe CurlyJoe
Republicans put forward 85 FILIBUSTERS AGAINST passing a budget. Congress left town for over a month leaving an important bill dealing with DROUGHT that gives stability to farmers and ranchers that this disaster will have on the families and their operations wayyyyyy beyond this summer and covers them for at least 5 yrs.. YOU SHOULD BE WORRIED. I know I am, but not for the same reasons you are, it's obvious.
I can see why you are worried that Obama is so much more popular. Yeah,.......you're worried-–and losing everyday that your party continues to screw America.
@Cynthia L. ... the smart half of America has been worried for the past 3 1/2 years in which Odumbo and the dumbocrats have avoided passing a budget ... passed the corrupt, unconstitutional, pork laden Trillion dollar Obamacare monstrosity ... squandered a trillion dollars ... chose and followed brain dead Nancy Peoli in the House ... murdered Brian Terry and 200+ innocent Mexicans with Fast n' Furious ... downgraded our country's credit ... kept unemployed at 8.2% ... weakened our military ... etc., etc. etc.. In November, when Obdumbo and all you Obama stooges get neutered, Amerrica will get back to normal.
I believe it is the democrats that wanted to end the session wiithout passing a dorught bill, so they have something to cry about to get reelected.
@Howard – to be blunt, you're an idiot. The SMART half of America has known for years that the mess we are in was NOT caused by Obama, nor was the extent of the damage the Repugs caused known when he assumed office, but the tide has been stemmed. No thanks to the Grand Obstructionist Party who has put party ahead of country and been able to manufacture parroted talking points on ACA and Budget.
NEWSFLASH: – ACA is a freakin' GOP HEALTH plan!! It's modeled completely on Robmeycare, up to and INCLUDING the individual mandate. Budgets are NOT the responsibility of the POTUS. It's up to the House to introduce a budget bill, and when that is done with Defense Spending increases and anti-abortion rides attached, the Dem-controlled Senate will NOt pass it.
If you have issues with the state of affairs, take it up with the root cause of the problem – your Teapug GOP congress!!!
if anyone should get a tax break it would be Olympians and active soldiers.
It seems to me the real heroes are the military personnel who serve in combat areas. They should be exempt from paying taxes, at least for the period of time they are in the combat zone. Also, if they are permanently disabled.
I'm tired of all their BS...Everyone of them! Phelps family is in forclosure but he's sporting a million dollar pad, the female gymists mother just declared bancrupcy but her and her daughters are all in London uring the games and we're going to make their earnings "non taxed?" Can you say CROOCK OF SHIP !
We have our military in harms way constantly, seperated by their loved ones and we tax their megar income.....I paid just under 40% of my earnings in taxes last year and they ate half of my bonus! I tired of "taxation without representation.....and I sure as hell don't consider Ried representation, Pelosi (she's just an idiot) and the same can be said of the repulicans! I want to see all their tax records...and I think you'll discover a vast majority of them don't pay like you and me! they don't have the same health care as you and me! Thety don't have the same retirement as you and me...something is wrong! As a country, we deserve to fall! Maybe then we can get rid of this useless trach we call government!
Between the Repubs not wanting the rich to pay taxes and Obama wanting to give breaks for any and all special circumstances, the middle class is really getting squeezed to provide the entire tax base of the country.
Sounds like a great idea... However, it is not. Olympic athletes are no different than anyone else in our society. Many of us work in fields that we love but do not pay well. Many people in the teaching profession do it because they love it and they are great at what they do. Do we exempt them? We should but we do not. So if we want to remove tax revenue from the treasury, lets give a tax exemption on the earnings of teacher. Imagine how that would add a bit more more qualified individuals to the list of students studying to be teachers at college. Imagine how many more teachers would stay in their profession. American wins far greater from the tax revenues lost from teacher's not paying taxes than from the amounts of money earned as Olympians - especially from individuals who will typically earn between $1million to $100 million in endorsements and more over their lifetime. Olympians worked hard to get where they are. They should be proud to have the high honor to represent OUR country. They do not need cash and prizes in the form of tax breaks to encourage participation and excellence. The medals are their own incentives in this country. Those that need help or those who did NOT medal. The medalists will certainly do well in endorements, tv public speaking and movie opportunities for years to come.
Come on Barack. I support you but why not give a tax break to all the teachers in the nation. They contribute more than any olympian ever will.
Then why the high drop out rates and low test scores? Some teachers MAY deserve it but come on, most don't. Look at their results.
Do these reporters even understand what progressive tax brackets are? The 35% tax bracket doesn't even start until $388,000 and only income OVER that amount is taxed at that rate. If Phelps gets 130,000 and has no exemptions or deductions (impossible) his tax bill would be around 29,000 which is an effective tax rate of about 23%. It would actually be less due to taking deductions and exemptions that everyone gets. It amazes me how people still don't understand that being in the highest tax bracket doesn't mean that you pay that rate on all of your income. Someone who doesn't understand this has no business being a White House producer for CNN. Rubio is an idiot too. Taxes aren't punishment. Everyone pays taxes on cash prizes no matter where they come from or how you get them. I guess Rubio thinks that gamblers shouldn't be 'punished' (taxed on their winnings) for being really good at poker and winning a bunch of money.
Obama favors cutting Olympians' tax bill
CUT A TAX BILL ???
Be still my heart...
IT IS NOT a PANDER at re-election time
OBAMA has " evolved "
someone started a facebook page to support the athletes: http://www.facebook.com/pages/Dont-Tax-Olympians/331147930313181
all the patriotic repubs complaining about someone getting a tax break. Get over it. Not all athlets get big endorsement deals and the ones that do will pay taxes just not on the metal money. Mitt hardly pays any taxes but you all seem to think he is great.Usual suspects weighing in to use the post to complaine about president. Keep complaining cause no one is listening anymore we are all focused on your guy mitt the twitt. Want to know about his taxes and his deal with baine. Retired but still president and drawing a pay chek that he deposits in the caymens. Really guys whats your spin on that??????
"Michael Phelps has earned four gold medals and two silvers, amounting to $130,000 in accompanying cash prizes. That translates to nearly $46,000 in taxes owed by Phelps, assuming his income is taxed at 35 percent – the highest income tax bracket."
Does Mr. Mooney understand how the US tax system works? First, $130,000 falls into the 28% bracket for single filers, not the 35% bracket. Second, the system is progressive, so you don't pay 28% on the entire amount. Someone who is single and makes $130,000, without any deductions accounted for would only pay $29860 in taxes, or an effective rate of 23%.
Then Obama needs to cut the taxes for our armed forces. The represent the U.S. as well and put their lives on the line!!!!!!
Obama supports anything that sounds nice. Unfortunately, he does not look far enough down the road to understeand how offensive his ideas are to others in similar situations. Also, his "support" (like with gay marriage) is only that and will not materialize into anything of substance because he will not put his political carrier on the line for anyone.
Obama can never come forward with any positive new legislations. He is always doing "follow the leader" but he is never the leader. I suppose the wind was blowing in the right direction when he decided to follow Rubio's proposed legislation. Right now we have a non-leader in the White House and we have to get that changed in November when Romney is voted in.
The IRS taxes the recipients of Nobel Prizes too. Do you get a free ride for brains too or just brawn?
Surely Rubio could come up with a tax plan that affects all of the people, all of the time, and not just 70+ Olympic Medals Winners once every 4 years. He will make a great vice-president.....not!
Republicans: "Simplify the tax code! Except when it's politically expedient NOT to!"
Humbug. Income is income, and we should treat it all the same way, no matter who earns it nor how they earn it, so long as they earn it legally.
OK so let me get this straight...Obama says we should tax the rich and they should pay their fair share. Michael Phelps probably would tell you that he made more money on endorsements than he did in the Olympics. If these "kids" are representing our country and we give them a break because they "worked so hard" why would we not make a tax exemption for our military folks because they are the ones doing the hardest work. Give them a break. And most soldiers live below the poverty rate! Screw the athletes, make them pay their taxes like the rest of our citizens. And God bless America-from a Desert Storm Vet
If the Olympians 'volunteer' like the president claims, they should not expect a cash reward for doing well. They have worked hard to get achieve the amazing feats, but their reward should be the pride from being the worlds best underwater basket weaver or whatever their event is. Let's tal about tax breaks for teachers or service members before we give a limp wrist to the Nike athletes.
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